Answer the Question on the Basis of the Following Consumption

question 140

Multiple Choice

Answer the question on the basis of the following consumption schedules.DI signifies disposable income and C represents consumption expenditures.All figures are in billions of dollars. Refer to the given data.At an income level of $40 billion,the average propensity to consume:

• A) is highest in economy (1).
• B) is highest in economy (2).
• C) is highest in economy (3).
• D) cannot be determined from the data given.

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Definitions:

Book Value

The value of an asset according to its balance sheet account balance, taking into account the cost of the asset less any depreciation, amortization, or impairment costs.

Fair Value

The financial return from selling an asset or the financial obligation to cover a liability in a transaction among market entities at the point of appraisal.

Goodwill

Goodwill is an intangible asset that arises when a business is purchased for more than the fair value of its net assets, representing elements of value such as brand reputation, customer relations, and intellectual property.

Fair Value

An estimate of the price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.