The slope of the aggregate expenditure line is the:
A)marginal propensity to consume (MPC).
B)fraction of each dollar of extra income that households save.
C)change in income divided by the change in consumption.
D)total consumption in the country as a percentage of real GDP.

Question

Quizplus · Accepted Answer

The slope of the aggregate expenditure line represents the change in aggregate expenditure for every one unit change in real GDP. This is equivalent to the MPC, which is the fraction of each additional dollar of income that is spent on consumption. Therefore, the correct answer is A.

The Slope of the Aggregate Expenditure Line Is The