Refer to the information provided in Figure 8.4 below to answer the questions that follow. Figure 8.4
-Refer to Figure 8.4. Which consumption function implies the smallest MPS?

Question

Refer to the information provided in Figure 8.4 below to answer the questions that follow.

Figure 8.4
-Refer to Figure 8.4. Which consumption function implies the smallest MPS?

Quizplus · Accepted Answer

C₃ implies the smallest MPS because it intersects the consumption axis at a higher level than the other two consumption functions. This indicates that for a given level of income, a smaller proportion of income is saved and a larger proportion is consumed.

Refer to the Information Provided in Figure 8