When income is zero within the Keynesian cross model planned expenditure will be greater than zero and the intercept of the consumption function will hence not be zero either. The reason for this feature of the model is that either: The Marginal Propensity to Save (MPS) is greater than 0.5 The Marginal Propensity to Consume (MPC) is greater than 0.5 Autonomous consumer expenditure depends only on the level of national income Autonomous consumer expenditure does not depend on the level of national income Only one answer can be correct. Please pick one and explain your reasoning.
When income is zero within the Keynesian cross model planned expenditure will be greater than zero and the intercept of the consumption function will hence not be zero either. The reason for this feature of the model is that either: The Marginal Propensity to Save (MPS) is greater than 0.5 The Marginal Propensity to Consume (MPC) is greater than 0.5 Autonomous consumer expenditure depends only on the level of national income Autonomous consumer expenditure does not depend on the level of national income Only one answer can be correct. Please pick one and explain your reasoning.
Chapter18: The Keynesian Model
Section: Chapter Questions
Problem 9SQP
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Question
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When income is zero within the Keynesian cross model planned expenditure will be greater than zero and the intercept of the consumption function will hence not be zero either. The reason for this feature of the model is that either:
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The Marginal Propensity to Save (MPS) is greater than 0.5
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The Marginal Propensity to Consume (MPC) is greater than 0.5
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Autonomous consumer expenditure depends only on the level of
national income -
Autonomous consumer expenditure does not depend on the level of national income
Only one answer can be correct. Please pick one and explain your reasoning.
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