Suppose Saving Is $1,000 When Income Is $10,000 and the MPC

question 129

Multiple Choice

Suppose saving is $1,000 when income is $10,000 and the MPC equals 0.9. When income increases to $15,000, saving is

• A) $1,500.
• B) $1,400.
• C) $900.
• D) $500.

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Definitions:

Forecasting Future Profitability

A financial analysis method used to estimate a firm's future profits based on historical data, trends, and other economic indicators.

Intraperiod Income Tax Allocation

Allocating income taxes within a period among different parts of the income statement.

Transitory Income Items

Items on a financial statement that are not expected to recur with regularity, reflecting unusual or non-recurring transactions.

Income Statement

A report that outlines a firm's financial results, including income, expenditures, and net profit or loss, for a given fiscal period.