Answered: 12) At the end of the year George…

12) At the end of the year George received a bonus of $1000 and he spent $500 of it, saving the other $500. What was his marginal propensity to consume? A) 1.00 B) 0.75 C) 0.50 D) 0.25

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter9: Deductions: Employee And Self-employed-related Expenses

Section: Chapter Questions

Problem 15CE

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Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

D9)

12) At the end of the year George received a bonus of $1000 and he spent $500 of it, saving the
other $500. What was his marginal propensity to consume?
A) 1.00
B) 0.75
C) 0.50
D) 0.25

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