The higher the marginal propensity to consume, the steeper is the slope of the consumption function.

Question

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The marginal propensity to consume (MPC) measures the increase in consumer spending resulting from a one unit increase in disposable income. A higher MPC indicates that consumers are likely to spend a larger portion of any additional income they receive. This leads to a steeper slope of the consumption function, as there is a greater increase in consumption for each unit of increase in income.

The Higher the Marginal Propensity to Consume, the Steeper Is