When the Consumption Function Becomes Steeper

question 52

Multiple Choice

When the consumption function becomes steeper,

• A) less of every dollar is consumed.
• B) the saving function also become steeper.
• C) the MPC rises.
• D) the MPC falls.

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services.

Factory Overhead

All indirect costs incurred during the manufacturing process, excluding direct materials and direct labor costs.

Direct Labor

Labor costs that are directly associated with the production of goods or the provision of services.

Nails and Screws

Basic hardware items used in construction and carpentry to fasten materials together.