If National Income Increases by $20 Million and Consumption Increases

question 304

Multiple Choice

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

• A)4.
• B)0.75.
• C)0.5.
• D)0.25.

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Definitions:

Compensation Schedule

A structured plan that outlines the salaries, wages, benefits, and bonuses that employees receive from an employer.

Budget-gaming Problem

A situation where individuals or departments manipulate or exaggerate their budget needs in order to secure larger allocations for themselves, often at the expense of the organization's overall efficiency.

Compensation Scheme

A structured plan designed to reward employees for their work, including salaries, benefits, and bonuses.

Straight Line Pay

A method of compensation where an employee receives a fixed rate of pay, irrespective of the number of hours worked or the quantity of output.