The Marginal Propensity to Consume Is Difficult to Estimate Because

question 63

Multiple Choice

The marginal propensity to consume is difficult to estimate because

• A) it depends on expectations of future income
• B) it depends on perceptions regarding the permanence of changes in income
• C) it depends on credit and borrowing constraints
• D) it declines as uncertainty increases
• E) all of the above

---

Definitions:

Vertically Integrated

A company's consolidation of all or part of the production process and supply chain within itself, controlling different stages of production usually to increase the company's power in the marketplace.

Competitive Market

A market structure where numerous producers compete to sell their goods or services to many buyers, leading to efficient pricing and innovation.

Market Price

The present cost at which a product or service is available for purchase or sale in the marketplace.

Net Marginal Revenue

The difference between the marginal revenue earned from selling an additional unit of a product or service and the marginal cost of producing that unit.