If an Expense Is Paid for in Cash,then

question 19

Multiple Choice

If an expense is paid for in cash,then

• A)liabilities will decrease.
• B)assets will decrease.
• C)assets will increase.
• D)equity will increase.

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Definitions:

MPS

Marginal Propensity to Save, which measures the proportion of additional income that households save rather than spend on consumption.

APS

The Average Propensity to Save, which is the proportion of income that households save rather than consume.

MPC

The marginal propensity to consume, which is the portion of additional income that a consumer spends on goods and services.

Consumption

The total value of goods and services consumed by households and businesses.