"Men are disposed, as a rule, and on the average, to increase their consumption as their income increases, but not by as much as the increase in their incomes." Which of the following is consistent with this statement by J.M.Keynes?
A)The slope of the consumption function is positive and less than one.
B)The slope of the consumption function is greater than that of the 45-degree line.
C)The slope of the consumption function is negative.
D)The slope of the consumption function is equal to one.

Question

Quizplus · Accepted Answer

The statement suggests that as income increases, consumption also increases but not by as much. This implies that the slope of the consumption function is positive but less than one. Therefore, choice A is the best option.

"Men Are Disposed, as a Rule, and on the Average