The Marginal Propensity to Consume Is Calculated by

question 268

Multiple Choice

The marginal propensity to consume is calculated by

• A) dividing consumption by income.
• B) dividing income by consumption.
• C) dividing the change in income by the change in consumption.
• D) dividing the change in consumption by the change in income.

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Definitions:

Double Taxation

Double Taxation is a tax principle referring to income taxes being paid twice on the same source of earned income. It can occur when income is taxed at both the corporate level and personal level, or in two different countries.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders; it has rights and liabilities independent of those owners and can enter into contracts, sue, and be sued.

Sole Proprietorships

A business structure where a single individual owns and operates the business, bearing full responsibility for its debts and obligations.

Capital

Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.