The Slope of the Consumption Function Is Equal to the Marginal

question 10

True/False

The slope of the consumption function is equal to the marginal propensity to save.

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Definitions:

Progressivity

A characteristic of a tax system in which the tax rate increases as the taxable amount increases, placing a larger burden on high-income earners.

Federal Payroll Tax

Taxes imposed by the federal government on the wages of employees, which fund social security and Medicare programs.

Equilibrium Price

The value at which there is a perfect match between how much of a good or service is wanted and how much is provided, leading to a state of market equilibrium.

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded.