Consumption is most likely to respond one-for-one with changes in ...

[pepyto]

Consumption is most likely to respond one-for-one with changes in current income when
 
  A) the change in current income results from a one-time bonus.
  B) people believe the change in their current income is temporary.
  C) people are able to borrow as much as they wish, as long as they pay it back.
  D) the change in current income is caused by the business cycle.
  E) none of the above

Question 2

Which of the following best defines the IS curve?
 
  A) the combinations of i and Y that maintain equilibrium in the goods market
  B) illustrates the effects of changes in i on investment
  C) illustrates the effects of changes in i on desired money holdings by individuals
  D) the combinations of i and Y that maintain equilibrium in financial markets

[olderstudent]

Answer to Question 1

E

Answer to Question 2

A

[pepyto]

Wow, this really help

[lkanara2]

Thanks for the timely response, appreciate it