The Slope of the Consumption Function Is

question 101

Multiple Choice

The slope of the consumption function is

• A) perfectly horizontal at the equilibrium level.
• B) equal to 1.
• C) equal to the MPC.
• D) vertical at the full employment level of income.

---

Definitions:

MACRS Depreciation

A method of depreciation used for tax purposes in the United States, allowing businesses to recover the cost of an asset over a specified life span through annual deductions.

Incremental Cash Flow

The additional operating cash flow that an organization receives from taking on a new project.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

Capitalization

The total value of all a company's outstanding shares of stock, representing the company's market value.