Economics · Consumption Function
Which of the following is/are correct for a linear Keynesian consumption function with a positive intercept on the Y-axis (C = a + bY, where a > 0)? 1. It has a positive intercept on the Y-axis. 2. Average Propensity to Consume (APC) = Marginal Propensity to Consume (MPC)3. MPC continuously declines as income rises4. Average Propensity to Consume (APC) > Marginal Propensity to Consume (MPC) Select the correct answer using the codes given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11 and 4 are correct.✓
- 2Only 2 and 3 are correct.
- 31, 3 and 4 are correct.
- 4Only 1 is correct.
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1 and 4 are correct.
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