If the Marginal Propensity to Consume Equals 0

question 27

Multiple Choice

If the marginal propensity to consume equals 0.75,then based on the simple model presented in this chapter,one would expect a $100 decrease in investment spending to lead to a total _____ in spending of _____.

• A) increase;$100
• B) increase;$400
• C) decrease;$100
• D) decrease;$400

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Definitions:

Implicit Interest Rate

The interest rate implied in the lease payments of a leasing agreement, used in lease accounting to determine lease liabilities and right-of-use assets.

Residual Guarantee

A guarantee made by the seller to the buyer that the value of an asset will at least be equal to a specified amount at the end of a lease term.

Lease Payment

Regular payments made by a lessee to a lessor for the use of an asset for a specified period as outlined in a lease agreement.

Lease Payment

Payments made by a lessee to a lessor for the use of a leased asset, typically defined in the lease agreement and paid over the lease term.