The Slope of the Consumption Function Is Equal to the

question 31

Multiple Choice

The slope of the consumption function is equal to the

• A) average propensity to consume.
• B) marginal propensity to consume.
• C) rate of interest.
• D) saving function.
• E) multiplier.

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Definitions:

Industry Profits

The total earnings generated by companies within a specific industry, after all costs and expenses are deducted.

Increasing-cost Industry

An industry in which the costs of production increase as the industry output increases, often due to the inputs' prices rising as demand for them grows.

Long-run Supply Curve

A graphical representation showing the quantities of goods that a producer is willing and able to supply over a period when all costs are variable.

Elastic Supply Curve

A concept in economics describing a supply curve where the quantity supplied changes significantly in response to a change in price.