The Slope of the Consumption Function

question 41

Multiple Choice

The slope of the consumption function:

• A)is vertical.
• B)is horizontal.
• C)equals 1.
• D)equals the marginal propensity to consume.

---

Definitions:

Unearned Service Revenue

Income received by a company for services yet to be performed; considered a liability until the service is delivered.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.

Operating Cash Outflow

Cash expenditures during a specific period related to operational activities, including paying for goods, services, and employee wages.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor costs.