Monopolistically competitive firms face a perfectly elastic demand curve

The figure above shows a nation's consumption function. If disposable income is $4 trillion, then the MPC is ________ and saving is ________

A) negative; positive B) positive; positive C) positive; zero D) negative; negative E) positive; negative

Higher taxes affect real GDP indirectly through both the consumption channel and the output supply channel

a. True b. False Indicate whether the statement is true or false