-In the above table, C is consumption expenditure, I is investment, G is government expenditure, and NX is net exports. All entries are in dollars. The slope of the aggregate expenditure function is
A) 0.60.
B) 0.70.
C) - 0.10.
D) 0.10.

Question

-In the above table, C is consumption expenditure, I is investment, G is government expenditure, and NX is net exports. All entries are in dollars. The slope of the aggregate expenditure function is
A) 0.60. 
B) 0.70. 
C) - 0.10. 
D) 0.10.

Quizplus · Accepted Answer

The slope of the aggregate expenditure function is determined by the marginal propensity to consume (MPC), which is the change in consumption expenditure (C) divided by the change in income. In this context, the slope is given as 0.60, indicating that for every additional dollar of income, consumption increases by 60 cents.

-In the Above Table, C Is Consumption Expenditure, I Is