As disposable income increases,consumption spending
A)increases by the same amount
B)decreases by the same amount
C)increases by less than the increase in disposable income
D)decreases by less than the increase in disposable income
E)does not change at all

Question

Quizplus · Accepted Answer

As disposable income increases, consumption spending typically increases, but by less than the increase in disposable income due to the marginal propensity to consume being less than one.

As Disposable Income Increases,consumption Spending