If consumers' expectations about future income are very optimistic, then we should expect
a. the consumption function to shift downward.
b. consumers to move up along the consumption function.
c. the consumption function to shift upward.
d. consumers to move down along the consumption function.
c
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Ten individuals have $100 and identical preferences for picnics, p, and kayak trips, k, where U(p, k) = k0.5p0.5. The price of picnics is $5 and the price per kayak trip is $ 10
What is the shortage/surplus in the market when the supply of picnics totals 120? A) There is a surplus of 20. B) There is a shortage of 20. C) The market is in equilibrium. Therefore, there is no surplus/shortage. D) There is not enough information to answer this question.
Full employment is defined by the Council of Economic Advisers as
A) 4 percent. B) every adult who wants to work has a job. C) the unemployment rate associated with zero inflation. D) the unemployment rate associated with the normal frictions in the labor market.
Which of the following statements is incorrect?
A. A country cannot be open to international capital flows, control its domestic interest rate and fix its exchange rate. B. A country can be open to international capital flows and fix its exchange rate but could not also control its own domestic interest rate. C. A country can be open to international capital flows, control its domestic interest rate, and fix its exchange rate. D. A country can be open to international capital flows and control its own domestic interest rate but it can't fix its exchange rate.
The demand curve for a product might shift as the result of a change in:
A. consumer incomes. B. consumer tastes. C. the prices of related goods. D. all of these.