Economics · Consumption Theories
According to Keynes' Absolute Income Hypothesis, the consumption function is expressed as C = C̄ + cYd. In this equation, what does 'c' represent?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Autonomous consumption independent of income
- 2Marginal Propensity to Consume (MPC)✓
- 3Average Propensity to Consume (APC)
- 4Disposable income after taxes and transfer payments
Correct answer
Marginal Propensity to Consume (MPC)
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