If Consumption Increases by $9 When Disposable Income Increases by $10,the

question 143

Multiple Choice

If consumption increases by $9 when disposable income increases by $10,the marginal propensity to consume is equal to

• A) 0.1.
• B) 0.9.
• C) 1.0.
• D) 9.0.
• E) 10.0.

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Definitions:

Original Principal

The initial amount of money loaned or invested, before any interest or profits are added.

Missing Value

A data point or an element in a statistical or mathematical model that is not observed or recorded.

Compounded Annually

The annual computation of interest that adds together the original investment and the previously earned interest.

Maturity Value

The amount payable to an investor at the end of a fixed term investment, including the principal and the interest.