ECO442
The MPC refers to the fraction of additional disposable income that is consumed.
Answer: true
APS refers to that proportion of income that is devoted to
Answer: saving
The is the ratio of change in consumption to the change in income which symbolically can be written as .
Answer: mpc ; i”c/i”y
“men are disposed as a rule and on the average, to increase their consumption as their income increase but not by as much as the increase in their incomeâ€?. This statement was credited to —
Answer: j.m. keynes
The of the linear graph defines the marginal propensity to consume
Answer: slope
The slope of the saving function is the
Answer: mps
“The MPC is constatnt at all levels of income. It is the MPC that tells us how much additional spending will be induced by each naira change in income\” This statement is credited to
Answer: J.M. Keynes
The value of the marginal propensity to consume determines the size of
Answer: multiplier
The higher the MPC, the multiplier
Answer: higher
The following consumption function represent C = 0.99Y
Answer: long run
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