The Keynesian consumption function exhibits all of the following properties except that:
A) the marginal propensity to consume is between 0 and 1.
B) the average propensity to consume decreases as income increases.
C) only unexpected policy changes influence consumption.
D) current income is the primary determinant of consumption.

Question

Quizplus · Accepted Answer

Unexpected policy changes can influence consumption, but they are not the only factor that affects consumption. Other factors, such as expectations about future income and wealth, interest rates, and consumer confidence, can also influence consumption.

The Keynesian Consumption Function Exhibits All of the Following Properties