Quèstion 4 Assume the economy's consumption and saving schedules simultaneously shift downward. This must be the result of: O A. An increase in household wealth. O B. An increase in personal taxes. O. An increase in disposable income. O D. The expectation of a recession A Moving to another question will save this response.
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- Question 7 If the MPC in the economy is 0.75, govemment could shift the aggregate demand curve rightward by $30 billion by cutting taxes by $10 billion. O A. true. O B. false.v Question Completion Status: A Moving to another question will save this response. Quèstion 4 Assume the economy's consumption and saving schedules simultaneously shift downward. This must be the result of: O A. The expectation of a recession O B. An increase in household wealth. O C. An increase in personal taxes. O D. An increase in disposable income. Moving to another question will save this response. SHARP AQUOS3. Other things being constant, what will be the effect of each of the following on consumption and saving schedules? (a) Concern grows over rising prices. (b) Real interest rates fall. How will the following situations affect the investment demand curve? (a) Unplanned inventories rise to new highs. O A firm decides to increase its current inventory levels.
- hich theory of consumption best explains the consumption behavior of consumers of our economy? Question No: 02 [Marks: 10] If the State Bank started printing large quantities of Pakistani Rupees (Rs), what would happen to the number of Pakistani Rupees a dollar could buy? Why? Question No: 03 [Marks: 10] Deseribe the difference batuuean foreian diract investmet and foraion nortfolie invastment Who is mora likelu toQUESTION 21 What is the marginal propensity to consume? a. The ratio of the change in consumption to the change in national income O b. The proportion of national income that goes on consumption O c. The additional spending by a consumer when the price of a good falls O d. The additional revenue received by a firm when it attracts a new customerQuèstion 4 "As disposable income increases, consumption:" O And saving both increase. O Decreases and saving increases. O And saving both decrease. O Increases and saving decreases.
- If a $5,000 increase in income leads to additional savings of $1,250, the marginal propensity to consume is 1.33 0.25 4 O 0.753. Suppose that you are a consumption smoother. You expect to live for another 28 years. You just learned that you will receive a permanent raise at your job of $1560. Answer the following: (a) How much extra do you consume this year? (b) What is your marginal propensity to consume out of this income change?QUESTION 8 Consumption 0 45° O H CD+CF. A E Income C B F Refer to the given diagram. The marginal propensity to consume is equal to O AE+OE. O CF + CD. CB+ AB. Consumption
- Assume in a simple economy that thc level of saving is -500 when aggregate ourput equals zero and that the margina! propensity to save is 0.2. Derive the saving function and the consumption function, and draw a graph showing these func- tions. At what level of aggregate ouiput does the consumption curve cruss the 45° line? Explain your answer and show this un the graph.The difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positiveWhen there's an increase in the cost of electricity for operating firms machines: O a. The investment demand curve will shift to the right O b. The consumption schedule will shift downward O c. The saving schedule will shift downward O d. The investment demand curve will shift to the left