"Men Are Disposed, as a Rule, and on the Average

question 27

Multiple Choice

"Men are disposed, as a rule, and on the average, to increase their consumption as their income increases, but not by as much as the increase in their incomes." Which of the following is consistent with this statement by J.M.Keynes?

• A)The slope of the consumption function is positive and less than one.
• B)The slope of the consumption function is greater than that of the 45-degree line.
• C)The slope of the consumption function is negative.
• D)The slope of the consumption function is equal to one.

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Definitions:

Matching

An accounting principle that requires expenses to be matched with the revenues generated in the same period, ensuring accurate earnings measurement.