The vertical intercept of the consumption function equals ________ and the slope equals ________.
A)the mpc; autonomous consumption
B)autonomous consumption; the mpc
C)the unplanned component of consumption; the planned component of consumption
D)the planned component of consumption; the unplanned component of consumption

Question

Quizplus · Accepted Answer

Autonomous consumption is defined as the consumption spending that is not related to the level of disposable income. Marginal propensity to consume (mpc)is the change in consumption divided by the change in income. Graphically, this is the rise divided by the run of the consumption function, which is its slope.

The Vertical Intercept of the Consumption Function Equals ________ and the Slope