If the Marginal Propensity to Consume Is 0

question 125

Multiple Choice

If the marginal propensity to consume is 0.75, the multiplier for taxes and transfer payments is:

• A)less than 4.
• B)equal to 4.
• C)greater than 4.
• D)equal to 0.75.

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Definitions:

Deposits In Transit

Funds that have been received and recorded by a business but not yet credited by its bank, affecting the reconciliation of bank statements.

Cash Receipts

Money received by a business during a given period, from activities such as sales, services, loans, or equity infusions.

Cash Sales

Transactions in which customers pay for goods or services at the time of purchase with cash.

Cash Register

A device, either mechanical or electronic, designed to record and compute transactions where sales occur.