When drawn against current income, the slope of the $$C d ( r ) + I d ( r ) + G \text { curve is equal to the }$$ marginal
A)product of labour.
B)propensity to save.
C)benefit from investment.
D)product of capital.
E)propensity to consume.

Question

Quizplus · Accepted Answer

The slope of the C d ( r ) + I d ( r ) + G curve (which represents the total demand in the economy) when drawn against current income is equal to the marginal propensity to consume (MPC). This is because as income increases, consumption tends to increase by a certain proportion (MPC) and the slope represents the change in demand for every change in income level. Therefore, the correct choice is E, the propensity to consume.

When Drawn Against Current Income, the Slope of The Cd(r)+Id(r)+G curve is equal to the C d ( r ) + I d ( r ) + G \text { curve is equal to the }Cd(r)+Id(r)+G curve is equal to the

When Drawn Against Current Income, the Slope of The $C d ( r ) + I d ( r ) + G \text { curve is equal to the }$