The marginal propensity to consume (MPC) is defined as the fraction of
a. extra income that a household consumes rather than saves.
b. extra income that a household either consumes or saves.
c. total income that a household consumes rather than saves.
d. total income that a household either consumes or saves.
a
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A steep LM curve implies that
A) an increase in government spending will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in government spending and taxes will have a large multiple effect on output. D) A and B.
Local governments rely most heavily on
a. personal income taxes b. corporate income taxes c. estate taxes d. property taxes e. excise taxes
You are given the following information about the economy: the nominal interest rate = 8%; the real rate of interest = 6%.The inflation premium is
A. 6%. B. 2%. C. 14%. D. 8%.
The federal budget deficit is found by:
A. subtracting government tax revenues plus government borrowing from government spending in a particular year. B. subtracting government tax revenues from government spending in a particular year. C. cumulating the differences between government spending and tax revenues over all years since the nation's founding. D. subtracting government revenues from the noninvestment-type government spending in a particular year.