Question: The chapter introduced a linear consumption function, which assumes the marginal propensity to consume is equal at all levels of disposable income. Yet many research

The chapter introduced a linear consumption function, which assumes the marginal propensity to consume is equal at all levels of disposable income. Yet many research studies show that MPC varies across income levels. Would you expect MPC to be greater for lower or higher income groups? How would relaxing the assumption of a constant MPC, allowing it to vary across income groups, change the multiplier?

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