One implication of a straight-line aggregate expenditures curve is that the
A) marginal propensity to consume is constant.
B) average propensity to consume is constant.
C) average propensity to save is constant.
D) marginal propensity to save increases as income increases.

Question

Quizplus · Accepted Answer

A straight-line aggregate expenditures curve indicates a constant marginal propensity to consume (MPC), meaning that for every additional dollar of income, the same proportion will be consumed.

One Implication of a Straight-Line Aggregate Expenditures Curve Is That