Aggregate consumption will certainly increase if

Q: During recessions investment Answer falls by a larger percentage than GDP. falls by about the same…

A: Recession refers to the situation of lower economic activity. All the economic activities will…

Q: Expected rate of retur ✓ (Click for List) The increase in profit of a firm anticipates it will…

A: The expected rate of return is the estimated profit or loss an investor foresees from an investment,…

Q: The Role of the Consumption Function

A: Consumption function is defined as  C= c+bY Where c is autonomous consumption ie the amount which…

Q: According to Keynes, wealth or credit is a factor that affects consumption. An example of wealth is…

A: Wealth is the value of economic resources either in terms of goods or money measured at a particular…

Q: Which of the following statements is​ correct? A)Actual investment equals planned investment when…

A: Unplanned inventories: - Unplanned inventory is the increase in the inventory investment over the…

Q: Investment spending in macroeconomics refers to:   adding to productive capital and changes to…

A: Investment spending in macroeconomics refers to option 1) adding to productive capital and changes…

Q: An increase of $200 million In investment leads to a rise in national income by $1000 million. Find…

A: The information given is as follows:- Change in investment = $200 million Change in national income…

Q: The consumption schedule relates: O consumption to saving. O disposable income to domestic income. O…

A: Consumption schedule is a table that shows the relationship between Y(Income) and Consumption…

Q: The MPC is Group of answer choices the change in consumption divided by the change in income.…

A: MPC is stated as marginal propensity to consume.

Q: 0 45° Real GDP, Y (trillions of dollars) How does the economy adjust if the economy is initially at…

A: The equilibrium occurs where the demand and supply forces are equal. The expenditure is key…

Q: If unplanned change in inventory is zero    aggregate output is positive when planned aggregate…

A: The equilibrium level of real gross domestic product, or GDP, as determined by the…

Q: Consumption is O positively related to household income and wealth and households' expectations…

A: The consumption expenditure refers to the spending done by the households on various goods and…

Q: Plot the aggregate consumption function and planned aggregate spending.

A: Consumption function reflects relationship between consumption expenditure and disposable…

Q: Assume that the level of autonomous consumption in an economy equals 400, the level of planned…

A: Given information The autonomous consumption is 400 Planned investment (I) is 200 MPC = 0.6…

Q: The marginal propensity to consume plus the marginal propensity to save equals     A)  zero   B)…

A: Marginal propensity to consume refers to the ratio of change in consumption and change in income.…

Q: If consumers increase their preference for foreign goods and services, aggregate expenditure will…

A: Aggregate demand is the sum of consumption,  investment,  government spending and net export. This…

Q: If the Federal Reserve (the central bank of the U.S.) raises the interest rates, what will happen to…

A: Aggregate expenditure is the sum of consumption spending, investment, government spending and net…

Q: nge in inventories. an unplanned

A: In Aggregate Expenditure model, if Real output is less than planned aggregate expenditure then there…

Q: Exogenous changes in spending refer to changes in planned spending: O related to changes in output…

A: The aggregate demand curve shows the inverse relationship between the price level and the total…

Q: An overheated economy is most likely to result in: price stability high inflation stagflation…

A: A country's economy often overheats when supply is less than the demand. The price of goods and…

Q: hich of the following will most likely cause movement along the consumption function?   a. A change…

A: Definition of  Consumption Function : A consumption function shows  what is the consumption at…

Q: Between March and May of 2007, Africa's real disposable income increased from 61.3 billion  to 61.9…

A: Marginal propensity to consume ration of the change in the level of consumption to change in the…

Q: The consumption function shows a positive relationship between an individual's stock of wealth and…

A: Disposable income is income minus net taxes.  i.e., Disposable income = Income - Net taxes…

Q: If actual GDP is less than potential GDP: Group of answer choices businesses are producing at…

A: When Aggregate demand and aggregate supply are equal , goods market is in equilibrium . And it…

Q: Which of the following statements is true? Business investment includes purchases of…

A: The term "business investment" refers to the expenditure of resources by a company or an individual…

Q: A rise in interest rate.

A:

Q: Aggregate demand (AD) is A,B,C, OR D A total spending, economy-wide, on durable goods and services.…

A: The aggregate demand refers to the total demand for all goods and services in an economy. It helps…

Q: Average propensity to consume refers to the ratio of _________ expenditure to the corresponding…

A: When a household earns income then this income can be either consumed or saved. The measure of…

Q: Fluctuations in investment: are larger during expansions than during recessions. account for little…

A: Economic fluctuations are almost impossible to predict with much accuracy. Investment fluctuates…

Q: Aggregate consumption decreases as consumer confidence falls. Aggregate demand shifts   (Click to…

A: Consumer's consumption depends on the level of confidence. .

Q: In a graph of the aggregate demand curve, an increase in investment by businesses is represented by…

A: The real GDP refers to all the finished goods and services produced in an economy in a given fiscal…

Q: If PAE is greater than Y, we expect: Multiple Choice there will be no change in inventories. the…

A: Answer - Need to find- If PAE is greater than Y, we expect Evaluating the options:- there will be…

Q: Create a diagram to explain the three main characteristics of the consumption function.

A: The consumption function shows the relationship between the consumption and level of income.

Q: In an economy the marginal propensity to consume is 0.9 and increase in investment is of 100 million…

A: Below is the given values: The marginal Propensity consume = 0.9 Increase in investment = 100…

Q: The consumption function macroeconomics is often written as C= a + b(Y-T) where b expresses:   a.…

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: Autonomous consumption is independent of income and must equal to zero True False

A: Consumption is an important component of aggregate demand or GDP that is determined by the use of…