The Marginal Propensity to Consume (MPC) Is Computed as the Change

question 70

Multiple Choice

The marginal propensity to consume (MPC) is computed as the change in consumption divided by the change in:

• A) GDP.
• B) income.
• C) saving.
• D) none of the above.

---

Definitions:

Earnings per Share

This refers to the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Liquidity

The ability of an asset to be quickly converted into cash without significant loss in value, essential for assessing the financial health of businesses.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned into cash over a period.

Price-Earnings Ratio

A valuation metric that compares a company's share price to its earnings per share, used to gauge if a stock is over or under-valued.