If combine the accounting definition E= C+I and the consumption function C=co + cY to give an equation in which expenditure is a function of output, E = f (Y), and we plot this function on axes with income on the horizontal axis and expenditure on the vertical axis, a reduction in the marginal propensity to consume will lead to: a. a shift downwards in the line with unchanged slope b. a less steep line c. a shift upwards in the line with unchanged slope d. a steeper line
If combine the accounting definition E= C+I and the consumption function C=co + cY to give an equation in which expenditure is a function of output, E = f (Y), and we plot this function on axes with income on the horizontal axis and expenditure on the vertical axis, a reduction in the marginal propensity to consume will lead to: a. a shift downwards in the line with unchanged slope b. a less steep line c. a shift upwards in the line with unchanged slope d. a steeper line
Chapter18: The Keynesian Model
Section: Chapter Questions
Problem 6SQ
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If combine the accounting definition E= C+I and the consumption function C=co + cY to give an equation in which expenditure is a function of output, E = f (Y), and we plot this function on axes with income on the horizontal axis and expenditure on the vertical axis, a reduction in the marginal propensity to consume will lead to:
a. a shift downwards in the line with unchanged slope
b. a less steep line
c. a shift upwards in the line with unchanged slope
d. a steeper line
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