If the MPC Equals 0.75, Then

question 377

Multiple Choice

If the MPC equals 0.75, then

• A) for every $100 increase in consumption, real Gross Domestic Product (GDP) increases by $75.
• B) consumption is always more than real Gross Domestic Product (GDP).
• C) for every $100 increase in real Gross Domestic Product (GDP), saving increases by $75.
• D) for every $100 increase in real Gross Domestic Product (GDP), saving increases by $25.

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Definitions:

COGS

COGS, or Cost of Goods Sold, represents the direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Payables Turnover Rate

An efficiency ratio that measures how quickly a company pays off its suppliers, calculated as cost of goods sold divided by average accounts payable.

Accounts Payable Balance

The total amount of short-term liabilities or obligations a company owes to its creditors or suppliers.

Sales

The total revenue generated from goods or services sold by a company during a specific period.