Economics · Consumption Function
Which of the following statements regarding the consumption function is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The break-even level of income occurs where planned consumption equals total income.
- 2Aggregate consumption varies inversely with consumer income, ceteris paribus.✓
- 3Consumption expenditure increases less than proportionally with an increase in income.
- 4The Average Propensity to Consume (C/Y) decreases as income increases.
Correct answer
Aggregate consumption varies inversely with consumer income, ceteris paribus.
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