The marginal propensity to consume is defined as A disposable income divided by

The marginal propensity to consume is defined as a

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51) The marginal propensity to consume is defined as A) disposable income divided by consumption.B) the change in disposable income divided by the change in consumption.C) the change in consumption divided by the change in disposable income.D) consumption divided by disposable income.Answer: C 51) Diff: 1 Page Ref: 757/383 Topic: The Marginal Propensity to Consume Learning Outcome: Macro 8: Investigate the relationship between income and expenditures AACSB: Reflective Thinking 12
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52) If disposable income increases by $500 million, and consumption increases by $400 million, thenthe marginal propensity to consume is 52) Diff: 2 Page Ref: 757/383 Topic: The Marginal Propensity to Consume Learning Outcome: Macro 8: Investigate the relationship between income and expenditures AACSB: Analytic Skills 53) If disposable income falls by $40 billion and consumption falls by $30 billion, then the slope of theconsumption function is 53) Diff: 2 Page Ref: 757/383 Topic: The Consumption Function Learning Outcome: Macro 8: Investigate the relationship between income and expenditures AACSB: Analytic Skills 54) ________ is defined as national income+transfers-taxes. 54) Diff: 1 Page Ref: 758/384 Topic: Consumption and National Income Learning Outcome: Macro 8: Investigate the relationship between income and expenditures AACSB: Reflective Thinking Table 23 - 2 Consumption (dollars ) Disposable Income (dollars) $600 $1,000 900 1,500 1,200 2,000 55)Refer to Table 23-2.Given the consumption schedule in the table above, the marginal propensityto consume is A) 0.5.B) 0.6.C) 0.75.D) 0.8.Answer: B 55) Diff: 2 Page Ref: 760 - 761/386 - 387 Topic: The Consumption Function Learning Outcome: Macro 8: Investigate the relationship between income and expenditures AACSB: Analytic Skills 56)Refer to Table 23-2.Given the consumption schedule in the table above, the marginal propensityto save is 56) Diff: 2 Page Ref: 760 - 761/386 - 387 Topic: The Marginal Propensity to Save Learning Outcome: Macro 8: Investigate the relationship between income and expenditures AACSB: Analytic Skills 13
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