If an economist wants to make a prediction about the effects of a change in disposable income on the change in consumption spending based on historical data, she must assume that
A. the future will closely resemble the past.
B. consumption and disposable income will be negatively related.
C. the consumption function will have a downward slope.
D. as disposable income increases, consumer spending will remain constant.
Answer: A
You might also like to view...
A person keeps $500 in his home in order to be prepared for some unforeseen future event. This reflects his
A) speculative demand for money. B) asset demand for money. C) liquidity demand for money. D) precautionary demand for money.
What is the mission of the International Monetary Fund (IMF)?
What will be an ideal response?
Consumption is the purchase of goods and services by: a. households
b. government. c. business firms. d. foreign buyers.
How does an increase in near term spending needs affect the supply and demand curve for money?