Which of the following is true of the relationship between disposable income and consumption?
What will be an ideal response?
Consumption is the dependent variable and disposable income is the independent variable.
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Use the following circular flow diagram to answer the question below.
If box A represents businesses or firms, B the resource market, and C households, and if flow (3) represents money payments to households, then flow (1) would represent
A. consumption expenditures. B. the flow of goods. C. resources. D. payments to resources.
The CPI is reported once every
A) year. B) quarter. C) month. D) week. E) other year.
The slope of the scatter diagram representing the relationship between consumption and disposable income in the United States is approximately
a. 1.10. b. 0.30 c. 0.50 d. 0.90
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same. c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). e. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).