If Consumption Increases by $9 When After-Tax Disposable Income Increases

question 57

Multiple Choice

If consumption increases by $9 when after-tax disposable income increases by $10, the marginal propensity to consume (mpc) equals:

• A) 0.1.
• B) 0.9.
• C) 1.0.
• D) 9.0.

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Definitions:

Natural Resources

Natural resources are raw materials and components found in nature, such as minerals, forests, water, and fertile land, that can be utilized for economic gain and societal development.

Industrialized

Pertains to countries or regions that have developed extensive manufacturing industry as the predominant sector of their economy, typified by technological innovation and large-scale production.

Coal Deposits

Natural accumulations of coal, which is a combustible black or brownish-black sedimentary rock used primarily for electricity generation and steel production.

Political Economy

An interdisciplinary branch that studies the relationships between individuals, governments, and public policy, focusing on the economic implications of political actions.