Question

In the Keynesian model without a government sector, the marginal propensity to consume is the change in consumption divided by the change in income.

a. true
b. false

Answer 1

The statement that in the Keynesian model without a government sector, the marginal propensity to consume is the change in consumption divided by the change in income is true.

Step-by-step explanation:

In the Keynesian model without a government sector, the marginal propensity to consume (MPC) is indeed the change in consumption divided by the change in income. This statement is true. The MPC represents the share of an additional dollar of income that will be spent on consumption. It reflects the slope of the consumption function with a