Which of the following will most likely cause movement along the consumption function?
A. A change in disposable income
B. A change in interest rates
C. A change in tastes
D. A change in consumers’ expectations
Answer: A
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Policy lags tend to make monetary policy ________.
A. more effective in expansions than contractions B. less effective than fiscal policy C. pro-cyclical D. more effective than initially thought
Economic experience since 1973 indicate that, under floating exchange rates
A) large and persistent departures from external balance were not prevented. B) large and persistent departures from external balance were prevented. C) changes in exchange rates failed to act as automatic stabilizers. D) reduced monetary policy autonomy. E) monetary policy autonomy was protected.
Robert Lucas spurred the rational expectations revolution in ________
A) the 1960s B) the 1970s C) the 2000s D) the 1880s
If the marginal propensity is 0.75, then a $100 increase in investment will result in a maximum increase in equilibrium real gross domestic product of
A) $40.00 B) $100.00 C) $133.33 D) $400.00 E) $500.00