If Income Increases by $100 and $75 of the Increase

question 80

Multiple Choice

If income increases by $100 and $75 of the increase is spent (consumed) ,the MPS equals

• A)1/4
• B)1/2
• C)3/4
• D)4/5
• E)1

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Definitions:

Retailers

Businesses that sell goods directly to consumers.

Price Floor

A government-imposed minimum price set above the equilibrium price, intended to ensure fair conditions for producers.

Minimum Price

A price floor set by the government or a body, below which the product cannot be sold, aimed at protecting producers or farmers.

Government

is the system or group of people governing an organized community, often a state, which creates and enforces laws, regulates economic and social policies, and provides public services.