Following Is Consumption Schedules for Three Private Closed Economies

question 81

Multiple Choice

Following is consumption schedules for three private closed economies.DI signifies disposable income and C represents consumption expenditures.All figures are in billions of dollars.

-Refer to the above data.Suppose that consumption increased by $2 billion at each level of DI in each of the three countries.We can conclude that the:

• A) marginal propensity to consume will remain unchanged in each of the three countries.
• B) marginal propensity to consume will decline in each of the three countries.
• C) average propensity to save will fall at each level of DI in each of the three countries.
• D) marginal propensity to save will rise in each of the three countries.

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Definitions:

Timing

The selection of the best moment or speed at which to execute an action or operation.

Cash-Based Measure

An accounting method that recognizes revenues and expenses only when cash is exchanged.

Cash Flow

The overall sum of funds moving into and out of a company, particularly how it impacts the availability of cash.

Average Total Assets

A measure used to evaluate a company's efficiency at using its assets by calculating the average of its total assets over a specific period.