Which one of the following statements relating to marginal propensity to consume is INCORRECT? (a) Marginal propensity to consume for a given consumption function is usually less than 1; (b) If the people in a country save 30c out of every rand they earn, the marginal propensity to consume in this country is said to be 0.7; (c) If the marginal propensity to consume is given as 0.622, then the value of the simple multiplier will be 2.5; (d) The larger the value of the marginal propensity to consume, the steeper the consumption function will be.

Marginal propensity to consume is defined as the proportion of an aggregate raise in pay that a…

Answered: Which one of the following statements…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which one of the following statements relating to marginal propensity to consume is INCORRECT?
(a)	Marginal propensity to consume for a given consumption function is usually less than 1;
(b)	If the people in a country save 30c out of every rand they earn, the marginal propensity to consume in this country is said to be 0.7;
(c)	If the marginal propensity to consume is given as 0.622, then the value of the simple multiplier will be 2.5;
(d)	The larger the value of the marginal propensity to consume, the steeper the consumption function will be.

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