The schedule describing the Keynesian consumption function will become steeper with an increase in ________.
A)consumption spending
B)autonomous consumption
C)the marginal propensity to consume
D)the marginal propensity to save

Question

Quizplus · Accepted Answer

The schedule describing the Keynesian consumption function shows the relationship between disposable income and consumption spending. The slope of this schedule is determined by the marginal propensity to consume (MPC), which is the fraction of additional income that is spent on consumption. With an increase in the MPC, the consumption function becomes steeper, meaning that a larger percentage of each additional dollar of disposable income is spent on consumption. Therefore, the correct answer is C, the marginal propensity to consume.

The Schedule Describing the Keynesian Consumption Function Will Become Steeper