-The figure above shows a nation's consumption function.If disposable income is $2 trillion, then the MPC is ________ and saving is ________.
A) positive; positive
B) positive; negative
C) negative; positive
D) negative; negative
E) positive; zero

Question

-The figure above shows a nation's consumption function.If disposable income is $2 trillion, then the MPC is ________ and saving is ________.
A) positive; positive 
B) positive; negative 
C) negative; positive 
D) negative; negative 
E) positive; zero

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) is positive because it represents the change in consumption with respect to a change in income. Saving is negative when consumption exceeds disposable income, indicating dissaving.

-The Figure Above Shows a Nation's Consumption Function