What is the relationship between marginal propensity to consume (MPC) and income in Keynes's theory?

MPC is greater than one for all income levels.

MPC is constant and equal to one.

MPC is less than one and decreases with income.

What effect does an increase in the general price level have on the consumption function, according to Keynes?

Shifts the consumption function upward

Shifts the consumption function downward

Has no impact on the consumption function

Causes a proportional change in consumption

In the Keynesian consumption function, what does the parameter 'a' represent?

Marginal propensity to consume (MPC)

Intercept term or autonomous consumption

Average propensity to consume (APC)

Which of the following factors does NOT influence the consumption function, according to Keynes?

Changes in the general price level

Average propensity to save (APS)

What is the psychological law of consumption proposed by Keynes?

Consumption increases proportionally with income.

Consumption remains constant regardless of income changes.

Consumption increases, but not by as much as income.

Consumption decreases with increasing income.

How does a rise in interest rates generally affect consumption?

Causes a proportional change in consumption

What does the consumption function puzzle refer to?

The discrepancy between Keynes's theory and empirical findings

The consistent agreement between various consumption theories

The ease with which the consumption function can be predicted

The lack of research on factors influencing consumption

Which of the following is NOT an important feature of Keynes's consumption function?

Absolute level of current income as determinant

Marginal propensity to consume (MPC) greater than one

Stable consumption function in the short run

MPC less than one but greater than zero

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