In the definition of marginal propensity to consume, propensity to consume refers to ______.
a. the amount of extra taxes someone pays as a result of extra income
b. the total income someone receives, including any extra income
c. the additional amount of disposable income someone receives
d. the amount of additional income spent on consumer goods and services
d. the amount of additional income spent on consumer goods and services
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If the government has no debt initially, but then has annual revenues of $10 billion per year for 4 years and annual expenditures of $10.5 billion per year for 4 years, then the government has
A) a budget surplus of $0.5 billion per year and a debt of $2 billion at the end of the 4 years. B) a budget deficit of $0.5 billion per year and a debt of $2 billion at the end of the 4 years. C) a budget surplus of $0.5 billion per year and a surplus of $2 billion at the end of the 4 years. D) a budget deficit of $0.5 billion per year and a budget surplus of $2 billion at the end of the 4 years.
Relative to a no-trade situation, if the United States imported jeans, the U.S. domestic price of jeans would
a. rise, but domestic output would fall. b. decline, but domestic output would rise. c. decline as would domestic output. d. rise as would domestic output.