The Marginal Propensity to Consume Is

question 5

Multiple Choice

The marginal propensity to consume is:

• A) increasing if the marginal propensity to save is increasing.
• B) the proportion of total disposable income that the average family saves.
• C) the change in consumer spending divided by the change in aggregate disposable income.
• D) the change in consumer spending minus the change in aggregate disposable income.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation and entitles holders to vote on corporate matters and receive dividends.

Stated Value

The value assigned to no-par stock by the company's board of directors, used as the basis for accounting transactions.

No-Par

Refers to stocks issued without a par value, which means they do not have a nominal or face value.

Paid-In Capital

represents funds raised by a company through issuing securities like stocks, reflecting the additional amount over the par value that investors are willing to pay.