If the Marginal Propensity to Consume Was 0

question 80

Multiple Choice

If the marginal propensity to consume was 0.75, it would mean that:

• A) $0.75 of an additional $1 of individuals' after-tax income is spent on consumption.
• B) $0.75 of an additional $1 of individuals' after-tax income is saved.
• C) $0.25 of an additional $1 of individuals' after-tax income is spent on consumption.
• D) None of these is true.

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Definitions:

Contrapositive

In logic, a statement formed by negating both the hypothesis and conclusion of the converse of a conditional statement and then reversing them.

Proposition

A statement that expresses a judgment or opinion that can be either true or false.

Relationship

The manner by which two or more ideas, items, or individuals are linked together, or the condition of being linked.

Contrapositives

Logical statements that are derived by inverting and negating both the antecedent and the consequent of an original implication; often used in logical proofs.