Declining Marginal Propensity to Consume Means

question 41

Multiple Choice

Declining marginal propensity to consume means

• A)as income increases,spending increases proportionately.
• B)as income increases,a smaller percentage is spent on consumer goods.
• C)as income increases,a larger percentage is spent on consumer goods.
• D)as income decreases,spending remains constant as a percentage of income.

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Definitions:

Interest Annually

The amount of interest earned or paid over a one-year period.

Debt to Assets Ratio

A financial ratio that indicates the percentage of a company's assets financed by debt.

Current Assets

Resources anticipated to be turned into cash, disposed of, or utilized within a year or during the operational cycle, whichever period extends further.

Total Liabilities

The combined amount of obligations a company owes to external parties, including loans, accounts payable, mortgages, deferred revenues, and accrued expenses.