Under What Conditions Would the APC Equal the MPC at All

question 109

Multiple Choice

Under what conditions would the APC equal the MPC at all levels of disposable income?

• A)When autonomous consumption equals 0.
• B)When there is saving at very high levels of disposable income.
• C)When disposable income is greater than consumption.
• D)When the aggregate expenditure line is horizontal.

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Definitions:

Price Subsidies

Financial assistance provided by governments to lower the cost of goods or services, making them more accessible to consumers.

Income Subsidies

Income subsidies are financial assistance programs provided by governments to individuals or households to help them afford essential needs, thereby increasing their income.

Economic Inefficiency

A situation where resources are not allocated optimally, leading to wastage or less than maximal output in an economy.

Food, Conservation, and Energy Act

U.S. legislation enacted in 2008 aimed at governing a wide range of agricultural and food policies, including crop insurance and nutritional programs.