If the Average Propensity to Save (APS)is 0

question 301

Multiple Choice

If the average propensity to save (APS) is 0.60, then this means

• A)people are saving 60 percent of their disposable income.
• B)people are spending 60 percent of their disposable income.
• C)the marginal tax rate is 60.
• D)the government spends 60 percent of its revenues.

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Definitions:

Loss on Disposal

The loss incurred when the selling price of an asset is less than its carrying amount at the time of disposal.

Plant Asset

A long-term tangible asset used in the operation of a business that is not intended for sale.

Book Value

The net value of a company's assets, subtracting liabilities from the total assets; also refers to the value of an asset as per accounting records.

Natural Resources

Materials or substances such as forests, minerals, and water that occur in nature and can be used for economic gain.