The slope of the consumption function is equal to:
A)the MPC.
B)the MPS.
C)1/(1 - MPC).
D)MPC - MPS.

Question

The slope of the consumption function is equal to:
A)​the MPC.
B)​the MPS.
C)​1/(1 - MPC).
D)​MPC - MPS.

Quizplus · Accepted Answer

The slope of the consumption function represents the change in consumption resulting from a change in income. The MPC (marginal propensity to consume) is defined as the change in consumption resulting from a change in income, thus making the slope of the consumption function equal to the MPC.

The Slope of the Consumption Function Is Equal To