The Marginal Propensity to Consume

question 16

Multiple Choice

The marginal propensity to consume:

• A)is the proportion of disposable income that is consumed.
• B)is the ratio of disposable income to consumption.
• C)is the change in consumption relative to a change in disposable income.
• D)minus the marginal propensity to save must equal 1.
• E)is greater than 1 at all levels of income.

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Definitions:

Cognitive Approach

A psychological perspective that emphasizes mental processes, such as perception, memory, and problem-solving.

Personality Differences

Variations in characteristics, traits, and behaviors that distinguish one individual from another.

Respond to Stress

The process of reacting to and coping with stress, which can vary widely among individuals.

Kelly

George A. Kelly, a psychologist known for his personal construct theory, which posits that individuals continually test predictions about their environment and experiences.