Page 83 - Macroeconomics. book docx_Neat

14- APC declines when:

A. Income rises

B. Income falls

C. Saving is zero

D. MPC is zero

Answer: B

15- Which is correct?

A. MPC > 1

B. MPC < 0

C. MPC + MPS = 1

D. APC + APS = 2

Answer: B

True or False Questions

1. Consumption is the largest component of aggregate demand. (True)

83