As disposable income decreases, consumption:
A. decreases.
B. may either increase or decrease depending on the wealth effect.
C. may either increase or decrease depending on the mpc.
D. increases.
Answer: A
You might also like to view...
The "division of labor" refers to
a. discrimination in labor markets b. separating a job into smaller tasks completed by different people c. one worker who divides his time among different jobs and duties d. defining a job according to the appropriate sex e. the fact that two 20-year-olds are more productive than one 40-year-old
If investment changes because of a change in a factor other than the price level, then the
A) economy moves from one point on an AD curve to another point on the same curve. B) AD curve shifts. C) economy moves from one point on a short-run aggregate supply (SRAS) curve to another point on the same curve. D) SRAS curve shifts. E) none of the above
In general, it can be said that leisure is a "free good."
Answer the following statement true (T) or false (F)
If there is an inflationary gap in the economy, discretionary fiscal policy would likely involve an action to
A) shift the aggregate demand curve to the right. B) shift the aggregate demand curve to the left. C) shift both the aggregate demand curve and aggregate supply curve to the right. D) shift both the aggregate demand curve and aggregate supply curve to the left.