If an Increase in a Household's Disposable Income from $40,000

question 188

Multiple Choice

If an increase in a household's disposable income from $40,000 to $48,000 leads to an increase in consumption from $35,000 to $41,000,then the

• A) slope of the consumption function is 0.75.
• B) average propensity to consume is 0.75.
• C) marginal propensity to save is 0.20.
• D) marginal propensity to consume is 0.6.
• E) slope of the consumption function is 0.8.

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