Suppose the stock market rises, causing a rapid increase in consumers’ wealth. This would lead to
A. a downward movement along the consumption function.
B. a downward shift of the consumption function.
C. an upward movement along the consumption function.
D. an upward shift of the consumption function.
Answer: D
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When the price of an asset is growing rapidly, speculators:
A. usually look for other investment opportunities. B. have a strong incentive to sell the asset before its price gets even higher. C. often rush to buy the asset in the hopes of selling it later at a profit. D. typically refrain from buying the asset because they know its price will eventually fall.
The money market model is concerned with ________ and the loanable funds market model is concerned with ________
A) short-term nominal interest rates; long-term real interest rates B) short-term nominal interest rates; long-term nominal interest rates C) short-term real interest rates; long-term nominal interest rates D) short-term real interest rates; long-term real interest rates
Attempts by the government to reduce the rate of inflation often result in higher unemployment in the short run.
Answer the following statement true (T) or false (F)
When goods are produced privately, but the cost of their purchase is paid for by the taxpayer or some other third party,
What will be an ideal response?