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:

Backchannel Talk

Vocal signals given by the listener to indicate interest, understanding, or agreement without interrupting the speaker.

Euphemisms

Mild or indirect words or expressions used in place of ones considered harsh or blunt when referring to something unpleasant or embarrassing.

Symbolic Interaction

A sociological theory focusing on how people use symbols (including words and gestures) in interactions and how these interactions create social realities.

Demeaning Terms

Language or words used to belittle, insult, or express a low opinion of someone, often contributing to feelings of worthlessness or disrespect.