The Ratio of the Change in Consumption to the Change

question 116

Multiple Choice

The ratio of the change in consumption to the change in disposable income is the

• A) marginal propensity to consume.
• B) marginal propensity to save.
• C) average propensity to consume.
• D) average propensity to save.

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Definitions:

Gross Investment

The total amount spent on new capital assets before accounting for depreciation.

Depreciation

The reduction in the value of an asset over time, often due to wear and tear or the passage of time.

Inventory Investment

The stock of goods or raw materials kept by a business to meet future sales or production needs.

Hybrid Varieties

Plant varieties developed through the crossbreeding of two genetically different parent plants, aiming to produce offspring with desirable traits from both.