The Average Propensity to Consume Is The

question 11

Multiple Choice

The average propensity to consume is the:

• A) ratio of consumption to income.
• B) amount consumed out of an additional dollar of income.
• C) amount available for consumption after precautionary saving.
• D) ratio of consumption to wealth.

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Definitions:

Compounded Monthly

A method of calculating interest where the accrued interest is added to the principal sum each month, so that each successive calculation includes interest on the interest.

RRSP

A Registered Retirement Savings Plan, which is a retirement savings and investing tool for employees and the self-employed in Canada.

Compounded Annually

Interest on an investment that is calculated once a year and added to the principal sum of the investment.

Compounded Monthly

Compounded Monthly means applying interest to both initial principal and the accumulated interest from previous periods on a monthly basis.