An Increase in the Marginal Propensity to Save (MPS)

question 52

Multiple Choice

An increase in the marginal propensity to save (MPS)

• A) increases the value of the multiplier.
• B) increases autonomous consumption.
• C) increases the marginal propensity to consume (MPC).
• D) none of the above.

Determine appropriate investment opportunities based on residual income calculations.

Understand transfer pricing mechanisms within a corporation.

Determine the minimum acceptable transfer price from the standpoint of a selling division.

Evaluate how transfer prices affect divisional and overall corporate financial performance.

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Definitions:

Sensorimotor Period

A stage in early childhood (from birth to about 2 years of age) where learning occurs through sensory experiences and manipulating objects.

Assimilation

Assimilation is a cognitive process where individuals integrate new information into existing frameworks or schemas.

Accommodation

In cognitive development, the process of modifying existing cognitive schemas, perceptions, and understandings to incorporate new information.