If the MPC Increases in Value, What Will Happen to the Slope

question 137

Multiple Choice

If the MPC increases in value, what will happen to the slope of the consumption function?

• A)The slope will decrease and the consumption function will become flatter.
• B)The slope will decrease and the consumption function will become steeper.
• C)The slope will increase and the consumption function will become steeper.
• D)The slope will increase and the consumption function will become flatter.

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Definitions:

Expected Profits

The anticipated earnings from an investment or business venture, taking into account factors like revenue, costs, and risk.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. It is calculated on an annual basis, known as the annual percentage rate (APR).

Management by Exception

A management strategy where supervisors intervene only when their subordinates' performance deviates significantly from standards, allowing managers to focus on more critical issues.

Priority Attention

The action of focusing efforts and resources on tasks or issues deemed most important or urgent at a given time.