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Assume That an Increase in a Household's Disposable Income from $40,000

Question 90

Multiple Choice

Assume that an increase in a household's disposable income from $40,000 to $48,000 leads to an increase in consumption from $35,000 to $41,000, then the:


A) Slope of the consumption schedule is .75
B) Average propensity to consume is .75
C) Marginal propensity to save is .20
D) Marginal propensity to consume is .6

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