If the Marginal Propensity to Consume Declines, Then

question 75

Multiple Choice

If the marginal propensity to consume declines, then

• A)for any given change in income, there will be a smaller change in saving.
• B)nothing will happen to the consumption function.
• C)for any given change in income, there will be a larger change in consumption.
• D)for any given change in consumption, there will be a smaller change in income.
• E)for any given change in income, there will be a smaller change in consumption.

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Definitions:

Nonrenewable Resource

A natural resource that cannot be replenished or takes millions of years to form again, such as coal, oil, and natural gas.

Future Profits

This concept pertains to the expected earnings or gains that a business anticipates receiving in the upcoming periods.

Current Extraction

The process of removing natural resources, such as minerals or timber, from the earth at the present time.

Increase

A rise or growth in quantity, size, or degree.