Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 24, Problem 7DQ
To determine
The impact of saving incentives on consumption function.
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Students have asked these similar questions
What does it mean by the logic:
When output is too low, what needed is an increase in demand for goods and services. Investment is one component of demand, and saving equals investment. Therefore, if the government could just convince households to attempt to save more, then investment and output would increase.
If the marginal propensity to save increases, what happens to the consumption function?
If saving dropped sharply in the economy, what would likely happen to investment? Why?
Chapter 24 Solutions
Economics: Principles & Policy
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Similar questions
- Create a diagram to explain the three main characteristics of the consumption function.arrow_forwardWhy does a downshift of the consumption schedule typically involve an equal upshift of the saving schedule? What is the exception to this relationship?arrow_forwardThe graph shows the output function, savings function, and depreciation function for an economy. Show what happens when the investment rate decreases by half by shifting the appropriate curve or curves in the graph.arrow_forward
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