Data on After-Tax Income and Consumption Spending for the Adam

question 130

Multiple Choice

Data on after-tax income and consumption spending for the Adam Smith family are given below: $$\begin{array} { c c } \text { After-tax Income } & \text { Consumption Spending } \\\$9,000& \$ 18,100 \\\$ 14,000 & \$ 22,600 \\\$ 19,000 & \$ 27,100 \\\$ 24,000 & \$ 31,600\end{array}$$ Based on these data, the Adam Smith family has a marginal propensity to consume of:

• A) 0.9.
• B) 0.8.
• C) 0.75.
• D) 0.6.

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