In the equation C = a + bY, which describes the aggregate consumption function, 'a' stands for:
(a) The amount of consumption which is independent of income;
(b) The marginal propensity to consume;
(c) The amount of consumption when income is at a maximum;
(d) The average consumption level.
Answer: (a) The amount of consumption which is independent of income;
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What will be an ideal response?
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Indicate whether the statement is true or false
If you were a rational expectations economist, you would argue that
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