The Slope of the Consumption Function

question 158

Multiple Choice

The slope of the consumption function

• A) is undefined below the 45-degree line.
• B) is negative.
• C) equals the MPC.
• D) is positive and equals 1 - MPC.

---

Definitions:

Velocity of Money

The rate at which money is exchanged in an economy, often used to measure the health and vigor of economic activity.

Price Level

A calculation of the average cost of goods and services in an economy at a set point in time.

Nominal GDP

The market value of all final goods and services produced within a country in a specific time period, measured using current prices without adjusting for inflation.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all goods and services produced within a country's borders in a specific time period, in real terms.