If the marginal propensity to consume rises, then the consumption function on the Keynesian cross diagram
A) shifts up.
B) shifts down.
C) becomes flatter.
D) becomes steeper.

Question

Quizplus · Accepted Answer

When the marginal propensity to consume rises, it means that consumers are likely to spend a larger portion of an additional dollar of income. This behavior makes the consumption function steeper on the Keynesian cross diagram, as each additional unit of income leads to a larger increase in consumption.

If the Marginal Propensity to Consume Rises, Then the Consumption