The Marginal Propensity to Consume Is the

question 304

Multiple Choice

The marginal propensity to consume is the

• A) fraction of total disposable income consumed.
• B) fraction of GDP consumed.
• C) fraction of a change in disposable income that is consumed.
• D) total amount of disposable income consumed.

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Definitions:

Operating Expenses

Expenses incurred through the normal operations of a business, including rent, utilities, and salaries, but excluding costs of goods sold.

Vertical Analysis

A financial analysis method that lists each line item in a single period financial statement as a percentage of a base line figure.

Operating Expenses

The day-to-day costs involved in running a business, excluding the cost of goods sold.

Net Sales

Sales revenue minus returns, allowances, and discounts.