According to simple Keynesian theory, the slope of the aggregate consu

by

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

Positive
Negative
Zero
Infinity
This question was previously asked in
UPSC CAPF – 2019
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The correct answer is A, Positive.
According to simple Keynesian theory, the consumption function is typically represented as C = a + bY, where C is consumption, a is autonomous consumption (consumption independent of income), b is the marginal propensity to consume (MPC), and Y is income. The slope of the aggregate consumption curve (plotting C against Y) is given by the coefficient of Y, which is the MPC (b).
The marginal propensity to consume (MPC) represents the proportion of an additional unit of income that is spent on consumption. It is a fundamental assumption in Keynesian economics that the MPC is positive and less than one (0 < MPC < 1). Therefore, the slope of the aggregate consumption curve is positive, indicating that as income increases, aggregate consumption also increases.

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