The consumption function shows
A. a negative relationship between disposable income and planned consumption.
B. a negative relationship between planned consumption and aggregate saving.
C. a positive relationship between disposable income and planned consumption.
D. a positive relationship between an individual's stock of wealth and his level of planned consumption.
Answer: C
You might also like to view...
Which of the following best explains why economists are generally critical of unregulated monopolists?
a. Monopolists do not try to minimize their costs of production. b. Monopolists produce where marginal revenue is greater than marginal costs. c. Monopolists attempt to produce too many products, and as a result, their prices are high, and consumers waste time trying to choose between too many options. d. Monopolists restrict output, and as a result, they fail to produce units that are valued more than the marginal cost of producing them.
Curly told Larry about his new business venture: Curly pays Acme International $1,000 per month for supplies, works out of his apartment on his own computer and earns a monthly revenue of $1,500. Should Larry quit his job and do what Curly is doing?
A. Yes, as long as Larry has at least $1,000 in savings to get started. B. Not if Larry is earning more than $500 per month at his current job. C. Yes, as long as Larry can work out if his apartment and owns a computer. D. Not unless Larry can borrow the $1,000 monthly payment at no interest.
A good for which demand decreases when income increases is known as a(n) ________ good.
A. normal B. inferior C. complementary D. substitute
Which of the following is an advantage of fixing exchange rates?
A. making the prices of foreign goods more flexible in the domestic market B. making residents more mobile across countries C. limiting foreign exchange risk D. eliminating trade deficits