If the Consumption Function Is Defined as C = 7,250

question 256

Multiple Choice

If the consumption function is defined as C = 7,250 + 0.8Y,what is the value of the marginal propensity to save?

• A)0.2
• B)0.8
• C)5.8
• D)9.1

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Definitions:

Elasticity of Supply

A measure of how much the quantity supplied of a good changes in response to a change in its price.

Productive Capacity

The maximum output a company or economy can produce with its current resources and technology, without causing inflation.

Labor Changes

Adjustments in the workforce, including alterations in the number of workers, the quality of labor, or employment conditions.

Unit Elastic

A demand or supply situation where the percentage change in quantity demanded or supplied is exactly equal to the percentage change in price.