How Does an Increase in the Marginal Propensity to Consume

question 93

Essay

How does an increase in the marginal propensity to consume affect the consumption function? What happens to equilibrium output? Illustrate your answer with a graph of the income-expenditure model.

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Definitions:

Know-Nothing Party

Nativist, anti-Catholic third party organized in 1854 in reaction to large-scale German and Irish immigration; the party’s only presidential candidate was Millard Fillmore in 1856.

Fugitive Slave Act

Legislation passed in the United States that allowed for the capture and return of runaway enslaved people within the territory of the United States.

States' Rights

The principle or belief that certain rights are reserved to the states as distinct from the federal government, often invoked in debates over the balance of powers.