Exhibit 10-2 -The Marginal Propensity to Save (MPS) in Exhibit 10-2 Equals

question 135

Multiple Choice

Exhibit 10-2

-The marginal propensity to save (MPS) in Exhibit 10-2 equals

• A)0.80 or 4/5
• B)0.60 or 3/5
• C)0.40 or 2/5
• D)0.10 or 1/10
• E)0.20 or 1/5

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Definitions:

Expected ROE

The anticipated return on equity, which measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Market-capitalization Rate

The discount rate derived from the market capitalization of a company, used to determine the present value of its future earnings.

Product Life Cycles

The stages through which goods typically go through from development to withdrawal from the market, including introduction, growth, maturity, and decline.

Required Rate Of Return

This is the minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular project or investment.