Use the following to answer questions .
Exhibit: Consumption Functions
Figure 13-3
-(Exhibit: Consumption Functions) Which of the following statements is false?
A) At points j, k, and m, consumers spend all their disposable income on consumption.
B) The amount of consumption is positive even when disposable income equals zero.
C) The slope of the consumption function is the marginal propensity to consume.
D) At points j, k, and m, the marginal propensity to save equals zero.

Question

Use the following to answer questions .
Exhibit: Consumption Functions
Figure 13-3 
-(Exhibit: Consumption Functions) Which of the following statements is false?
A) At points j, k, and m, consumers spend all their disposable income on consumption. 
B) The amount of consumption is positive even when disposable income equals zero. 
C) The slope of the consumption function is the marginal propensity to consume. 
D) At points j, k, and m, the marginal propensity to save equals zero.

Quizplus · Accepted Answer

At points j, k, and m, the marginal propensity to save may be positive, negative or zero. It cannot be concluded that it equals zero at these points.

Use the Following to Answer Questions