Under what conditions would the APC equal the MPC at all levels of disposable income?
A)When autonomous consumption equals 0.
B)When there is saving at very high levels of disposable income.
C)When disposable income is greater than consumption.
D)When the aggregate expenditure line is horizontal.

Question

Quizplus · Accepted Answer

The APC equals the MPC when there is no autonomous consumption, meaning that all consumption is based on disposable income. In this case, there are no other factors causing consumption to vary, so the APC and MPC will be the same at all levels of disposable income.

Under What Conditions Would the APC Equal the MPC at All