The greater the MPC is, the ______ the slope of the demand curve.
A) greater
B) smaller
C) It depends on the trade balance.
D) The slope of the demand curve does not depend on this.

Question

Quizplus · Accepted Answer

The MPC (marginal propensity to consume) measures the change in consumption for a given change in income. When the MPC is greater, it means that consumers tend to spend a larger portion of their income on goods and services, so the demand for those goods and services is higher. This results in a steeper (greater) slope of the demand curve as the quantity demanded increases at a faster rate for a given change in price.

The Greater the MPC Is, the ______ the Slope of the Demand