The Slope of the Consumption Function Equals

question 53

Multiple Choice

The slope of the consumption function equals:

• A) 1 - MPS.
• B) 1 / (1 - MPS).
• C) 1 - MPC.
• D) MPC / MPS.

---

Definitions:

Break-Even Analysis

A financial calculation that determines the point at which revenue received equals the costs associated with receiving the revenue, thereby resulting in neither a profit nor a loss.

Contribution Margin

Contribution margin is a financial metric that represents the difference between a company's sales revenue and variable costs, used to assess the profitability of individual products or services.

Profit Goal

A financial objective set by businesses that aims to achieve a specific amount of profit over a certain period of time.

Management By Objectives (MBO)

A strategic management model that aims to improve the performance of an organization by clearly defining objectives that are agreed to by both management and employees.