An Increase in the Marginal Propensity to Save from

question 11

Multiple Choice

An increase in the marginal propensity to save from .1 to .2 will cause

• A)an increase in the multiplier and a given change in autonomous consumption (c0)to have a smaller effect on output.
• B)an increase in the multiplier and a given change in autonomous consumption (c0)to have a larger effect on output.
• C)a reduction in the multiplier and a given change in autonomous consumption (c0)to have a smaller effect on output.
• D)a reduction in the multiplier and a given change in autonomous consumption (c0)to have a larger effect on output.

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Definitions:

Departmental Contribution Margin

Departmental Contribution Margin refers to the contribution margin as calculated for specific departments within a company, showing the profit contribution of each department.

Separate Accounting Records

The practice of maintaining distinct records for different parts of a business's operations or for individual entities, ensuring clarity and precision in financial tracking.

Departments

Specific units or divisions within a business that have their own functions and responsibilities.

Departmental Income Statement

A financial statement that shows the revenue, expenses, and net income for each department within a company, helping to track the performance of distinct areas of the business.