Which statements are CORRECT for the Absolute Income Hypothesis? (A) The marginal propensity to consume (MPC) is a constant (B) As income increases, the average propensity to consume (APC) tends to approach the MPC (C) Average propensity to consume (APC) increases as income increases (D) Current saving/dis-saving has no bearing on future consumption

IIT JAM 2023 Question 36: Consumption and investment

Which statements are CORRECT for the Absolute Income Hypothesis?

Select all that apply.

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Consumption and investment has come up 74 times in 7 exams since 2005.

This question is on The Keynesian consumption function, part of Consumption and investment in Macroeconomics.

Consumption as a function of current income: the propensities to consume and save.

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