If DI falls by $100 billion, and C falls by $90 billion, the slope of the consumption is
A)−0.45.
B)0.45.
C)−0.90.
D)0.90.
E)0.50.

Name: If DI falls by $100 billion, and C falls by $90 billion, the slope of the consumption is A)−0.45. B)0.45. C)−0.90. D)0.90. E)0.50.
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Question

Quizplus · Accepted Answer

The slope of the consumption function (marginal propensity to consume) is calculated as the change in consumption divided by the change in disposable income. Here, it is -$90 billion / -$100 billion = 0.90.

If DI Falls by $100 Billion, and C Falls by $90