If the Average Propensity to Consume Is 0

question 103

Multiple Choice

If the average propensity to consume is 0.8, then the average propensity to save is

• A)0.
• B)0.2.
• C)0.8.
• D)1.

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Definitions:

Marginal Tax Bracket

The tax rate that applies to the last unit of income earned by an individual or business.

Municipal Bond

A municipal bond is a debt security issued by a city, municipality, or county to finance its capital expenditures.

Corporate Bond

A debt security issued by a corporation to raise capital, promising to pay back the borrowed money plus interest at specified future dates.

Ask Price

The lowest price a seller is willing to accept for an asset in a financial market.