The Slope of the Consumption Function Is Equal To

question 16

Multiple Choice

The slope of the consumption function is equal to:

• A) the MPC.
• B) the MPS.
• C) 1/(1 - MPC).
• D) MPC - MPS.

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Definitions:

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Dollar Amount

Indicates a specific value of money, usually in U.S. dollars, mentioned in financial transactions, budgets, and pricing.

Minimax Strategy

A decision-making strategy, especially in game theory, aiming to minimize the possible loss for a worst case (maximum loss) scenario.

Largest Cost

Refers to the highest expense in either a specific project or operation typically identified to assess and reduce financial outlays.