The Marginal Propensity to Consume

question 326

Multiple Choice

The marginal propensity to consume:

• A)is the change in consumption divided by the change in saving.
• B)is usually higher for unemployed individuals than for people who are very wealthy.
• C)is equal to the marginal propensity to save plus 1.
• D)tells policy makers the additional amount of investment spending that would accompany an additional amount of government spending.

---

Definitions:

Respondeat Superior

A legal doctrine that holds an employer or principal legally responsible for the wrongful acts of an employee or agent, performed within the scope of employment or agency.

Principal

The main individual or group participating in an agreement or deal, or the initial sum of money put in or borrowed, prior to adding interest.

Agent's Torts

Refers to wrongful acts committed by an agent that result in legal liability for the principal under certain conditions.

Vicarious Liability

Legal responsibility assigned to one party for the actions of another, typically in employer-employee relationships.