If Consumption Is $30,000 When Income Is $35,000, and Consumption

question 136

Multiple Choice

If consumption is $30,000 when income is $35,000, and consumption increases to $36,000 when income increases to $43,000, the MPC is

• A) 0.65.
• B) 0.75.
• C) 0.80.
• D) 0.95.

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Definitions:

Plant and Equipment

Long-term assets used in the operation of a business, such as machinery, buildings, and vehicles.

Goodwill Impairment

A charge that companies record when the value of goodwill on the balance sheet exceeds its fair value, indicating that the asset is overvalued.

Functional Currency

The currency of the primary economic environment in which an entity operates and carries out its transactions.

Life Expectancy

The average period that an individual is expected to live, based on statistical averages.