-In the above figure, if the marginal propensity to consume increases, the slope of the AE curve would
A) increase.
B) stay the same but the AE curve would shift downwards.
C) decrease.
D) stay the same but the AE curve would shift upwards.

Question

-In the above figure, if the marginal propensity to consume increases, the slope of the AE curve would
A) increase. 
B) stay the same but the AE curve would shift downwards. 
C) decrease. 
D) stay the same but the AE curve would shift upwards.

Quizplus · Accepted Answer

If the marginal propensity to consume increases, the slope of the Aggregate Expenditure (AE) curve increases because a higher portion of additional income is spent on consumption.

-In the Above Figure, If the Marginal Propensity to Consume