Which of the following statements concerning the effects of demographics on consumption is not true?
A)The size of the population affects the slope of the consumption function.
B)The age of the population affects the slope of the consumption function.
C)Other things equal, the level of consumption will rise with increases in population.
D)Younger households tend to have higher MPCs than older households.
E)Older households tend to have higher MPSs than younger households.

Question

Quizplus · Accepted Answer

The size of the population affects the level of consumption, not the slope of the consumption function. The slope is more influenced by factors like the marginal propensity to consume (MPC) and marginal propensity to save (MPS).

Which of the Following Statements Concerning the Effects of Demographics