Which of the following is not true about the marginal propensity to consume?
A. It is equal to the slope of the consumption function.
B. It is equal to the change in consumption divided by the change in disposable income.
C. It is always equal to or greater than 1.
D. It is equal to 1 - MPS.
Answer: C
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A tax is imposed on orange juice. Consumers will bear more of the burden of the tax: a. If the demand for orange juice is relatively inelastic and the supply is relatively elastic. b. If the demand for orange juice is relatively elastic and the supply is relatively inelastic. c. If the supply for orange juice is perfectly inelastic
d. none of the above
Self-adjustment of markets is assumed in:
A. Classical economic theory. B. Keynesian theory. C. Supply-side economic theory. D. The eclectic viewpoint.
The various studies of the size of the fiscal multiplier by different economists suggest
A) general agreement that the fiscal multiplier value is relatively high. B) general agreement that the fiscal multiplier value has a range between 0.8 and 1.2. C) general agreement that the fiscal multiplier value is zero. D) there is a wide range of opinion on the size of the fiscal multiplier.
People demand more of product X when the price of product Y decreases. This means X and Y are:
a. Substitutes b. Complements c. Both inexpensive d. Not related