The slope of the consumption function equals:

A. 1-MPS
B. 1/(1-MPS)
C. 1-MPC
D. MPC/MPS
E. MPS

The correct answer is E. MPS, which stands for Marginal Propensity to Save. The slope of the consumption function, also known as the marginal propensity to consume (MPC), measures the change in consumption for every unit change in disposable income. However, the question specifically asks for the slope of the consumption function, which is MPS. MPS represents the proportion of additional income that is saved instead of spent.

To determine the slope of the consumption function, we need to understand the variables involved. The consumption function relates the level of consumption to the level of income.

The slope of a function represents the rate of change of the dependent variable (consumption) with respect to the independent variable (income). In other words, it measures how much consumption changes for every unit increase in income.

Now, let's look at the options one by one:

A. 1 - MPS: This option subtracts the Marginal Propensity to Save (MPS) from 1. The MPS is the proportion of additional income that individuals save. While this option is close, it doesn't provide the correct slope.

B. 1/(1 - MPS): This option also considers the MPS, but it takes the reciprocal of the difference between 1 and MPS. However, this is not the correct formula for the slope.

C. 1 - MPC: This option subtracts the Marginal Propensity to Consume (MPC) from 1. The MPC represents the proportion of additional income that individuals consume. This option provides the correct formula for the slope of the consumption function.

D. MPC/MPS: This option divides the MPC by the MPS. Although this ratio is important in economics, it is not the correct formula for the slope of the consumption function.

E. MPS: This option only represents the Marginal Propensity to Save (MPS). While the MPS is relevant, it alone does not give us the slope of the consumption function.

Therefore, the correct answer is C. 1 - MPC