Everything Else Held Constant,if Total Consumption Increases from $600 to $800

question 97

Multiple Choice

Everything else held constant,if total consumption increases from $600 to $800 because of an increase of disposable income of $400,then the mpc is equal to

• A)0.2.
• B)0.4.
• C)0.5.
• D)0.6.

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Definitions:

Simple Interest

A method to calculate interest charges on a loan or investment based on the original amount (principal) and the interest rate, but the interest does not accumulate or compound.

Maturity Value

The total amount that will be received by an investor at the end of a bond's term or a deposit's duration, including both the principal and interest.

Term Deposit

A banking term for a fixed-term investment held at a financial institution where money is locked in for a certain period of time, earning a specified interest rate.

Simple Interest

Interest calculated only on the principal amount, or original sum borrowed or invested, without compounding.