The slope of the consumption function equals the
A)MPC
B)MPS
C)APC
D)APS
E)ratio of the APC to the APS (i.e.,APC divided by APS)

Question

Quizplus · Accepted Answer

The slope of the consumption function represents the change in consumption (dependent variable) resulting from a change in disposable income (independent variable). This is the definition of the marginal propensity to consume (MPC), which measures the fraction of additional income that is spent on consumption. Therefore, the correct answer is A) MPC. The other options (B, C, D, E) are not related to the slope of the consumption function.

The Slope of the Consumption Function Equals the