How Does Propensity to Consume Affect Aggregate Demand (AD) Functions?
in Economics
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How Does Propensity to Consume Affect Aggregate Demand (AD) Functions?
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Increase in the propensity to consume causes an upward shift in the Aggregate Demand (AD) function (through an upward shift in the C- function). On the other hand, decrease in the propensity to consume causes a downward shift in AD function (through a downward shift in C-function).

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