Which of the Following Is Most Likely to Lead to an Increase

question 5

Multiple Choice

Which of the following is most likely to lead to an increase in current consumption?

• A)an increase in personal income tax rates
• B)an increase in one's expected future income
• C)a decrease in one's marginal propensity to consume
• D)an increase in the interest rate

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Definitions:

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Bond Yield

The return an investor realizes on a bond, calculated as the annual interest payment divided by the bond's current market price.

Face Value

The nominal value printed on a bond, currency, ticket, or other financial instrument, representing its legal value rather than market value.

Market Price

The present rate at which a service or asset is available for purchase or sale.