Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 8, Problem 12QP
To determine
Explain the condition of increase in consumption without a decline in some other components.
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Chapter 8 Solutions
Economics (MindTap Course List)
Ch. 8.2 - Prob. 1STCh. 8.2 - Prob. 2STCh. 8.2 - The money supply has risen, but total spending has...Ch. 8.3 - Prob. 1STCh. 8.3 - Prob. 2STCh. 8.3 - Prob. 3STCh. 8.5 - Prob. 1STCh. 8.5 - Prob. 2STCh. 8 - Prob. 1QPCh. 8 - Prob. 2QP
Ch. 8 - Prob. 3QPCh. 8 - Prob. 4QPCh. 8 - Prob. 5QPCh. 8 - Prob. 6QPCh. 8 - Prob. 7QPCh. 8 - Prob. 8QPCh. 8 - Prob. 9QPCh. 8 - Prob. 10QPCh. 8 - Prob. 11QPCh. 8 - Prob. 12QPCh. 8 - Prob. 13QPCh. 8 - Prob. 14QPCh. 8 - Prob. 15QPCh. 8 - Prob. 16QPCh. 8 - Prob. 17QPCh. 8 - Prob. 18QPCh. 8 - Prob. 19QPCh. 8 - Prob. 20QPCh. 8 - Prob. 21QPCh. 8 - Prob. 1WNGCh. 8 - Prob. 2WNGCh. 8 - Prob. 3WNGCh. 8 - Prob. 4WNGCh. 8 - Prob. 5WNGCh. 8 - Prob. 6WNG
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- Which components of aggregate expenditure do not directly depend on current income?arrow_forwardelaborate three determinants in which consumption can be increased according to the consumption functionarrow_forwardElaborate three determninants in which consumption can be increased according to the consumption function.arrow_forward
- What does it mean when the aggregate expenditure line crosses the 45-degree line? In other words, how would you explain the intersection in words?arrow_forwardWhat is the difference between aggregate expenditure and aggregate demand? Why is the aggregate demand curve downward sloping while the aggregate expenditure line is upward sloping?arrow_forwardWhat is GDP in econimic terms?arrow_forward
- Based on The Aggregate Expenditure Model, what affects the level of consumption (five factors); and what affects the level of investment (four factors)?arrow_forwardThe consumption expenditure and output of the country is 500 billion and 100 billion respectively. Calculate the average propensity to consume.arrow_forwardWhy are changes in inventories included as part of investment spending? Suppose inventories declined by $1 billion during 2008. How would this affect the size of gross private domestic investment and gross domestic product in 2008? Explain.arrow_forward
- What are the determinants of aggregate demand? How do these determinants differ from the determinants of aggregate expenditure? What is the significance, if any, of these differences?arrow_forwardWhich of the following correctly describes how a decrease in the price level affects consumption spending? Select one: a. A decrease in the price level raises real wealth, which causes consumption to increase. b. A decrease in the price level decreases the amount of money a household needs to buy goods and so raises the interest rate, which causes consumption to increase. c. A decrease in the price level increases the amount of money a household needs to buy goods and so raises the interest rate, which causes consumption to increase. d. A decrease in the price level lowers real wealth, which causes consumption to decrease.arrow_forwardHow is it possible for consumption expenditure to be positive even when disposable income is zero?Why is it necessary for there to be some consumption when disposable income is zero, and what is this called?arrow_forward
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