Economics · Consumption Function
If a straight-line consumption function has a positive intercept on the vertical (y) axis, then:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The MPC and APC both fall as the level of disposable income increases.
- 2The MPC is constant and the APC falls as the level of disposable income increases.✓
- 3The MPC and APC both rise as the level of disposable income increases.
- 4The MPC is constant and the APC rises as the level of disposable income increases.
Correct answer
The MPC is constant and the APC falls as the level of disposable income increases.
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