An increase in marginal propensity to consume will:

CA Foundation · Business Economics · MTP · January 2026
An increase in marginal propensity to consume will:
(A) A. Lead to the consumption function becoming steeper.
(B) B. Shift the consumption function upwards.
(C) C. Shift the consumption function downwards.
(D) D. Shift the savings function upwards.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. Lead to the consumption function becoming steeper.

Topics: Determination of National Income

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