If autonomous consumption rises,the TE curve shifts __________,the marginal propensity to consume __________,and the TP curve __________.
A) upward; rises; shifts downward
B) upward; remains unchanged; remains unchanged
C) downward; rises; remains unchanged
D) upward; remains unchanged; shifts downward
E) none of the above

Question

Quizplus · Accepted Answer

When autonomous consumption rises, the Total Expenditure (TE) curve shifts upward because there is an increase in spending at all levels of income, but the marginal propensity to consume (MPC) remains unchanged as it is the slope of the TE curve, not its position. The Total Product (TP) curve remains unchanged because it is related to production output, not consumption patterns.

If Autonomous Consumption Rises,the TE Curve Shifts __________,The Marginal Propensity