If disposable income falls by $50 billion and consumption falls by $40 billion, then the slope of the consumption function is
A)1.20.
B)0.80.
C)0.70.
D)0.20.
E)0.10.

Name: If disposable income falls by $50 billion and consumption falls by $40 billion, then the slope of the consumption function is A)1.20. B)0.80. C)0.70. D)0.20. E)0.10.
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Question

Quizplus · Accepted Answer

The slope of the consumption function is calculated as the change in consumption divided by the change in disposable income, which is $40 billion / $50 billion = 0.80.

If Disposable Income Falls by $50 Billion and Consumption Falls