Slope of the consumption function is less than 1 What is meant-00683
This subjective question is related to the book/course
vu cs408 Human Computer Interaction.
It can also be found in
vu cs408 Mid Term Solved Past Paper No. 2.
Question 1: "Slope of the consumption function is less than 1".
What is meant by this statement?
The slope is less than 1 because not all the income is consumed some part of the income is saved.
What is meant by this statement?
Answer:
When we drawn in expenditure income space, the consumption function plots as a straight line with positive intercept, and a positive but less than 1 slope.The slope is less than 1 because not all the income is consumed some part of the income is saved.
