The slope of the consumption function equals the slope of the:

Question

Quizplus · Accepted Answer

The consumption function represents the relationship between disposable income and consumption expenditure. The slope of the consumption function represents the marginal propensity to consume (MPC), which is the increase in consumption expenditure resulting from an increase in disposable income. The slope of the aggregate expenditure line also represents the MPC, as aggregate expenditure is the sum of consumption expenditure, investment expenditure, government expenditure, and net exports. Therefore, the answer is B, the aggregate expenditure line.

The Slope of the Consumption Function Equals the Slope of The