On a graph with consumption on the vertical axis and disposable income on the horizontal axis, the slope of the line is
A)greater than one.
B)equal to one.
C)less than one.
D)undefined.

Question

Quizplus · Accepted Answer

The slope of the line on this graph represents the marginal propensity to consume (MPC), which measures the increase in consumption for every additional dollar of disposable income. An MPC less than one indicates that as disposable income increases, consumption increases at a slower rate. Therefore, the slope of the line is less than one, making choice C the best answer.

On a Graph with Consumption on the Vertical Axis and Disposable