If the MPC = 0.75 for a particular person this means that:
A. they will spend 75 cents of each new dollar they get.
B. if they receive $1 then they want to spend 25% of it.
C. if they receive $1 they want to spend roughly 75%, but probably won't do so.
D. they will spend 25 cents of the $1 and save 75 cents.
Answer: A
You might also like to view...
The coupon rate of a bond is equal to
A) the interest rate. B) the coupon payment. C) the interest payment. D) the face value.
Purchases of inventories by
A) firms are not counted in investment spending. B) firms are also counted in investment spending. C) households are also counted in investment spending. D) households and Firms are also counted in investment spending. E) foreign consumers are counter in investment spending.
The relationship between the level of investment and the change in the level of national income is the
a. principle factor generating the innovation cycle b. marginal propensity to invest c. administrative lag d. accelerator e. principle factor generating the real business cycle
If expected inflation were 2%, and teh real interest rate was 5%, what sector would be worse off if the actual inflation rate turned out to be 6%
a. Lenders. b. Borrowers. c. Both. d. None.