According to the Keynesian consumption function,an increase in disposable income will result in
A) a decrease in consumption.
B) an increase in consumption.
C) a decrease in investment.
D) an increase in investment.

Question

Quizplus · Accepted Answer

According to the Keynesian consumption function, an increase in disposable income will result in an increase in consumption. This is the basic premise of the theory of marginal propensity to consume, which suggests that as disposable income increases, individuals are likely to spend more money, thereby increasing consumption.

According to the Keynesian Consumption Function,an Increase in Disposable Income