If the Marginal Propensity to Consume Is 0

question 157

True/False

If the marginal propensity to consume is 0.8, the marginal propensity to save is 8.

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Definitions:

Overhead Costs

All costs on the income statement except for direct labor, direct materials, and direct expenses, covering expenses like rent, utilities, and insurance.

Volume of Units

The total number of individual units produced or sold by a business in a specified period.

General & Administrative Expenses

Operating expenses that are not directly tied to the production of goods or services, including salaries of non-sales personnel, rent, and office supplies.

WIP Inventory

Work-in-process inventory, which represents the costs of unfinished goods in manufacturing processes.