If the Average Propensity to Consume Is Initially 0

question 67

Multiple Choice

If the average propensity to consume is initially 0.8, the marginal propensity to consume is 0.75, and real disposable income increases by $1000, the value of saving

• A) increases by $200.
• B) increases by $250.
• C) decreases by $250.
• D) decreases by $200.

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Definitions:

Overconfidence

A cognitive bias characterized by an individual's overestimation of their own abilities, performance, or level of control.

Overconfidence

A cognitive bias wherein a person's subjective confidence in their judgements is reliably greater than their objective accuracy.

Offered A Job

The act of being presented with an opportunity for employment by an individual or organization.

Far Away

At, to, or from a great distance in space or time, often implying a place difficult to reach or a time long passed.