Which of the Following Consumption Functions Has a Marginal Propensity

question 1

Multiple Choice

Which of the following consumption functions has a marginal propensity to consume equal to 0.95?

• A)C = 95 + 0.87Y
• B)C = 0.95 + 0.87Y
• C)C = 1,000 + 0.05Y
• D)C = 1,000 + 95Y
• E)None of these

Recognize the theoretical underpinnings of social stratification theories, including functionalist and conflict perspectives.

Understand the concept and calculation of the money multiplier and its impact on the money supply.

Learn how the Federal Reserve's actions, such as open market operations, influence the money supply.

Identify the role of the required reserve ratio in the banking system and its effect on money creation.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or spread of data points in a data set, indicating how much the individual data points differ from the mean.

Population Mean

The average of a set of characteristics or numbers in the entire population.

Standard Error

A statistical measure that describes the accuracy with which a sample distribution represents a population using standard deviation.

Economics Class

A course of study that examines the production, distribution, and consumption of goods and services, focusing on economic theories and principles.