A Given Change in Disposable Income Would Have the Greatest

question 50

Multiple Choice

A given change in disposable income would have the greatest effect on aggregate demand with which of the following marginal propensities to consume?

• A)​0.4
• B)​0.6
• C)​0.8
• D)​0.2

---

Definitions:

Pre-tax Cost

The expense or cost incurred by a corporation before the deduction of tax liabilities.

Pay Interest

The act of compensating lenders or depositors for the use of their money, typically expressed as an annual percentage of the principal.

Face Value

The original value or nominal value of a security as stated by the issuer, often used in the context of bonds or other fixed-income securities.

Weighted Average Flotation

An average calculation of flotation costs for new securities, weighted by the proportion each security contributes to the total amount issued.