Which of the following graphs shows the correct effect on the consumption function when there is a decrease in real interest rates and the substitution effect is dominant? Figure A Figure B Total consumption Consumption O a. Figure B O b. Figure A O c. Figure C O d. Figure D Consumption function Figure C Income Income (GDP) Consumption Total consumption Income (GDP) Figure D Consumption function Income

Which of the following graphs shows the correct effect on the consumption function when there is a decrease in real interest rates and the substitution effect is dominant? Figure A Figure B Total consumption Consumption O a. Figure B O b. Figure A O c. Figure C O d. Figure D Consumption function Figure C Income Income (GDP) Consumption Total consumption Income (GDP) Figure D Consumption function Income

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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