If a straight-line consumption function makes a positive intercept at the Y-axis, it implies that the Marginal Propensity to Consume _ and the Average Propensity to Consume ___ as the level of income rises. (Fill up the blanks with the correct alternative.)

Question

The role of a catalyst is to change _____________ .

Answer 1

With a linear consumption function, the Marginal Propensity to Consume (MPC) is invariant, reflecting the constant slope. The Average Propensity to Consume (APC) decreases with rising income, as initial consumption expenditure constitutes a progressively smaller proportion of overall income.

If a straight-line consumption function makes a positive intercept at the Y-axis, it implies that the Marginal Propensity to Consume _ and the Average Propensity to Consume ___ as the level of income rises. (Fill up the blanks with the correct alternative.)

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The Correct Option is D

Solution and Explanation

Top Questions on Consumption Function

Questions Asked in CBSE Class XII exam

If a straight-line consumption function makes a positive intercept at the Y-axis, it implies that the Marginal Propensity to Consume _____ and the Average Propensity to Consume _______ as the level of income rises. (Fill up the blanks with the correct alternative.)

Show Hint

The Correct Option is D

Solution and Explanation

Top Questions on Consumption Function

Questions Asked in CBSE Class XII exam

If a straight-line consumption function makes a positive intercept at the Y-axis, it implies that the Marginal Propensity to Consume _ and the Average Propensity to Consume ___ as the level of income rises. (Fill up the blanks with the correct alternative.)