The Aggregate Consumption Function Is Based on a Number of Assumptions

question 11

Multiple Choice

The aggregate consumption function is based on a number of assumptions. Given these assumptions, which of the following statements is true?

• A)The MPC is greater than zero and less than one, and the APC falls as income rises.
• B)The MPC and APC are always less than unity.
• C)As income rises, the MPC falls and the APC rises.
• D)Below a certain level of income, APC > 1 and MPC < 0.
• E)The APC is greater than zero and less than one, and the MPC falls as income rises.

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Definitions:

External Subsystems

Components or units outside an organization that interact with or influence its operations and activities.

Buy-In

Refers to the agreement on a course of action or the decision-making process that gains the acceptance and support of stakeholders.

Change Process

The series of actions or steps taken to achieve a significant shift in direction, operations, or behavior within an organization or system.

Stakeholders

Individuals or groups that have an interest in the success and strategies of an organization, including employees, customers, investors, and suppliers.