Asked by
taniyah cherry
on Nov 30, 2024
Verified
If the MPC is three quarters,then an increase in disposable income will cause
A) consumption to rise by three times the increase in disposable income.
B) consumption to rise by four times the increase in disposable income.
C) consumption to increase,while saving decreases.
D) consumption to decrease,while saving increases.
E) consumption and saving both to increase,with consumption increasing more than saving.
MPC
The marginal propensity to consume, which is the portion of additional income that a consumer spends on goods and services.
Consumption
The total value of goods and services consumed by households and businesses.
- Evaluate the influence of consumer activities on patterns of saving and spending.
- Understand the importance of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS).
Verified Answer
AE
Learning Objectives
- Evaluate the influence of consumer activities on patterns of saving and spending.
- Understand the importance of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS).