As income grows, the consumption:
A) decreases.
B) grows the same as income.
C) grows by less than income.
D) grows by more than income.

Name: As income grows, the consumption: A) decreases. B) grows the same as income. C) grows by less than income. D) grows by more than income.
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Question

Quizplus · Accepted Answer

C) grows by less than income. This is because as people earn more, they tend to save a higher proportion of their income, meaning the marginal propensity to consume decreases.

As Income Grows, the Consumption