In June 1960,the Price of Gasoline in the Midwest Was

question 184

Multiple Choice

In June 1960,the price of gasoline in the Midwest was $0.169 per gallon and the CPI was 29.6 with a base period of 1982 to 1984.What was the real price of gasoline per gallon in base period dollars?

• A)$0.05 per gallon
• B)$0.057 per gallon
• C)$0.169 per gallon
• D)$0.571 per gallon
• E)$0.296 per gallon

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Definitions:

MPC

Marginal Propensity to Consume refers to the fraction of any additional income that is used for consumption purposes.

Consumption

The act of households utilizing goods and services.

Disposable Income

The sum of funds that families can allocate to expenditure and savings once they've paid their income taxes.

MPC

The marginal propensity to consume, which represents the proportion of an increase in income that is spent on consumption rather than being saved.