A change in consumption caused by a change in disposable income is shown by:
a. a movement along the consumption function.
b. a rightward shift of the consumption function.
c. a change in the slope of the consumption function.
d. a leftward shift of the consumption function.
e. the point where the consumption function touches the 45 degree line.
a
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In the steady-state diagram of the Solow model, an increase in saving per worker is shown by
A) shifting the saving-per-worker curve down, resulting in a lower steady-state capital—labor ratio. B) shifting the saving-per-worker curve up, resulting in a higher steady-state-capital—labor ratio. C) shifting the saving-per-worker curve up, resulting in a lower steady-state capital—labor ratio. D) shifting the saving-per-worker curve down, resulting in a higher steady-state capital—labor ratio.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output and prices. B. lower level of output and prices. C. higher level of output at lower prices. D. lower level of output at higher prices.
Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are
a. complementary goods. b. normal goods. c. inferior goods. d. substitute goods.
Which of the following is an example of a change in derived demand?
A. The demand for ice cream increases during a heat wave. B. The demand for large pickup trucks falls when the price of gasoline increases. C. The demand for buns increases when the price of food truck hot dogs increases. D. The demand for sunscreen falls when the local swimming pool increases prices.