Question 1
If Corinne's income is reduced to zero after she loses her job, her ________ will be greater than zero and her ________ will be less than zero.
◦ taxes; consumption
◦ saving; investment
◦ consumption; expenses
◦ consumption; saving
Question 2
The marginal propensity to consume is
◦ consumption times income.
◦ the amount of consumption at a specific level of income.
◦ a change in saving divided by a change in consumption.
◦ the fraction of a change in income that is consumed or spent.