Suppose Consumption Is $20,000 When Income Is $32,000 and the MPC

question 234

Multiple Choice

Suppose consumption is $20,000 when income is $32,000 and the MPC equals 0.8. When income increases to $40,000, consumption is

• A) $26.400.
• B) $28,000.
• C) $32,000.
• D) $72,000.

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Definitions:

Planning

The process of making plans for something, including setting goals, defining actions to achieve those goals, and mobilizing resources to execute the actions.

Situational Variable

External factors that can impact the outcome of a specific situation, affecting decision-making and behavior.

Enhancer

An agent or factor that increases or improves the quality, value, or extent of something.

Dependent Variable

In research, this is the variable that is tested and measured to see if it is affected by changes in another variable (independent variable).