Suppose That When Disposable Income Increases by $2,000, Consumption Spending

question 196

Multiple Choice

Suppose that when disposable income increases by $2,000, consumption spending increases by $1,500. Given this information, we know that the marginal propensity to consume (MPC) is

• A) 0.25.
• B) 0.75.
• C) 1.33.
• D) 4.

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Definitions:

Gender and Sexuality

Interrelated concepts where gender refers to roles, behaviors, activities, expectations, and societal norms associated with being male or female, and sexuality concerns a person’s sexual orientation, preferences, and identity.

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or social territory, typically subject to the same political authority and dominant cultural expectations.

Theory

A systematic set of ideas and principles designed to explain certain phenomena or patterns, often forming the basis for further exploration and testing.

Prosumer Capitalism

An economic system where consumers are also involved in the production process, often enabled by digital technology and altering traditional consumer-producer roles.