Vertical CI is 100 to 500 Horizontal GDP 100 to 500 C1g star

Vertical C+I is 100 to 500 Horizontal GDP 100 to 500, C+1g starts at 150 ends at 400, C starts at 100 ends 350

18. Refer to the above diagram that applies to a private closed economy. The slope of the consumption schedule in this figure reveals that the:
A. MPS rises as income rises.
B. MPS is constant.
C. APC is constant.
D. APC increases as income increases.

Solution

The slope of the consumption schedule in the given figure implies the marginal propensity to consume (MPC) which is constant. Hence, option (B) which should be MPC is constant is correct.