Absolute Income Hypothesis Quiz

The slope of a linear consumption function is equal to:

According to Keynes, which variable plays only a minor role in determining consumption?

According to Keynes's Absolute Income Hypothesis, the primary determinant of consumption is:

Which statement is correct for a linear Keynesian consumption function?

In the consumption function C = C₀ + cY, the parameter c measures:

According to Keynes's Psychological Law?

The consumption function is called non-proportional because:

The 45° line in a consumption diagram represents points where:

Why does APC fall as income rises in Keynes's model?

Autonomous consumption refers to consumption that occurs:

When the consumption function lies below the 45° line:

According to the Absolute Income Hypothesis, APC tends to:

Which economist developed the Absolute Income Hypothesis?

On a graph, autonomous consumption is represented by:

On a consumption function graph, the APC at a given point is measured by:

In the equation C = C₀ + cY, C₀ represents:

If MPC = 0.8, then an additional Rs.1000 of income will increase consumption by:

According to Keynes, APC is generally:

Which feature reflects Keynes's belief that spending habits do not change rapidly?

Which statement best summarizes Keynes's Psychological Law of Consumption?

Average Propensity to Consume (APC) is defined as:

The intersection of the consumption function with the 45° line indicates:

A household's actual current income is called:

Which of the following is induced consumption?

According to Keynes, higher income generally leads households to:

Keynes's Psychological Law of Consumption states that when income rises, consumption:

Which of the following best supports the existence of 0 < MPC < 1?

The portion of income not consumed is called:

If MPC = 0.75, then MPS equals:

If income rises from 1000 to 1100 and consumption rises from 950 to 1020, MPC equals: