The Marginal Propensity to Consume (MPC)is Related to the Marginal

question 109

True/False

The marginal propensity to consume (MPC)is related to the marginal propensity to save (MPS)by the formula MPC = 1 - MPS.
Out of any additional disposable income,the MPC and MPS measure the fractions that are spent and saved,respectively.

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Definitions:

Days' Sales

Days' sales, often referred to as days sales outstanding (DSO), measures the average number of days it takes a company to collect payment after a sale has been made.

Raw Materials Inventory

The total cost of all the materials that are used in the production of finished goods that have not yet been used.

Inventory Turnover

A financial ratio that measures how often a company's inventory is sold and replaced over a certain period, indicating the efficiency of inventory management.

Net Income

The company's financial gain remaining after deducting all expenses and tax liabilities from its revenue.