Use the following to answer question:
Figure 17.3
-(Figure 17.3) Which of the following statements is (are) TRUE?

Question

Use the following to answer question:
Figure 17.3 
-(Figure 17.3) Which of the following statements is (are) TRUE?

Quizplus · Accepted Answer

Statement I is true as the graph shows a positive relationship between income and expenditure. Statement II is also true as the slope of the line indicates that the marginal propensity to consume (MPC) is less than 1, which means that as income increases, the proportion of income spent on consumption decreases. However, Statement III is false as the graph only shows a relationship between income and expenditure, and it does not provide information about the causes of the relationship or the direction of causality.

Use the Following to Answer Question