A Consumption Function of the Form C = Co

question 47

Multiple Choice

A consumption function of the form C = Co + cYD has a positive vertical intercept Co, which indicates that

• A)some consumption is unaffected by changes in disposable income
• B)the mpc will increase as disposable income increases
• C)the apc will always increase as disposable income increases
• D)the apc will always be less than the mpc
• E)all of the above

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