According to simple Keynesian theory the slope of the aggregate consumption curve against income is ...........

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According to simple Keynesian theory, the slope of the aggregate consumption curve against income is

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CAPF 2019 Paper-1

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Positive

Negative

Zero

Infinity

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Explanation:

In the Keynesian perspective of aggregate demand, firms produce output only if they want to sell it. It states that aggregate real consumption expenditure is a function of real national income. This function should have the following properties: ÂAggregate real consumption expenditure is a function of real income which is stable. ÂSlope must lie between 0 and 1 which is positive ÂIf income increases then marginal propensity to consume itself decreases or remains constant.

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