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In a non-linear consumption function, how does marginal propensity to consume (MPC) change with an increase in income?
  • a)
    MPC remains constant.
  • b)
    MPC increases.
  • c)
    MPC decreases.
  • d)
    MPC becomes zero.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
In a non-linear consumption function, how does marginal propensity to ...
In a non-linear consumption function, as income increases, the marginal propensity to consume (MPC) tends to decrease. This means that the change in consumption for a given change in income becomes smaller as income rises.
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In a non-linear consumption function, how does marginal propensity to consume (MPC) change with an increase in income?a)MPC remains constant.b)MPC increases.c)MPC decreases.d)MPC becomes zero.Correct answer is option 'C'. Can you explain this answer?
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