When Jack's Income Increases by $1,000,he Spends an Additional $850

question 167

True/False

When Jack's income increases by $1,000,he spends an additional $850 dollars.This implies that his marginal propensity to save is 0.85.

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Definitions:

Premium Prices

Premium prices are higher than average prices charged for products or services, often because of perceived superiority in quality or branding.

Accounts Receivable Financing

A secured short-term loan that involves either the assignment or factoring of receivables.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount for immediate cash.

Short-Term Financial Plan

A strategic plan that outlines a company's financial activities and strategies for a short period, typically one year or less, to ensure liquidity and manage cash flows efficiently.