If the Marginal Propensity to Consume Is 0

question 176

Multiple Choice

If the marginal propensity to consume is 0.6, the marginal propensity to save is

• A)0.4.
• B)0).6.
• C)1.
• D)1.5.
• E)0.8.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock that entitles its holders to receive dividends in arrears before any dividends can be distributed to common stockholders, with missed dividends accumulating.

Net Income

The financial gain of a company post deduction of taxes and all costs from its revenue.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Basic Earnings

Typically refers to basic earnings per share, which is a measure of the amount of profit attributable to each outstanding share of a company's common stock.