Use the Following Graph of the Cost/benefit Model for Risk

question 84

Multiple Choice

Use the following graph of the cost/benefit model for risk analysis to answer the next five questions.

-What does (3) represent?

• A) Total cost
• B) Loss area
• C) Cost of controls
• D) Level of assurance
• E) Optimal point of reasonable assurance C

---

Definitions:

Consumption

Pertains to the aggregate volume of products and services that are purchased and consumed by families and people.

MPC

The marginal propensity to consume, which is the fraction of additional income that a household spends on consumption.

Disposable Income

Financially viable resources for households' spending and saving strategies after deducting income taxes.

Consumption

The action of using up a resource or the purchase of goods and services by households.