Question
The consumption function of an economy is given by dC/dY = 0.8 − 0.004Y. Consider the following statements: (
- I The MPC is constant at 0.8 (I
- I MPC declines as income (
- I Autonomous consumption is positive in this economy (I
- V At sufficiently high income levels, MPC could become negative
- Y rises — indicating a non-linear consumption function (II
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