Let consumption function be: C = 35 + 0.7 Y, where Y is disposable income and C is consumption. Let APC be average propensity to consume and MPC marginal propensity to consume. Then,
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1 mark, −0.33MacroeconomicsConsumption and investmentThe Keynesian consumption functionModerateabout 1 min
UoH 2011 Question 15: Consumption and investment
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What this question tests
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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