Author Question: Suppose there is an increase in autonomous consumption. Specifically, suppose c0 increases where C = ... (Read 100 times)

lak · **on:** Jun 30, 2018

Suppose there is an increase in autonomous consumption. Specifically, suppose c0 increases where C = c0 + c1YD. This increase in autonomous consumption will cause which of the following to increase?

A) equilibrium income
B) equilibrium disposable income
C) demand
D) all of the above
E) none of the above

Question 2

Based on our understanding of consumption and saving, we know that the marginal propensity to consume and the marginal propensity to save must

A) be equal to each other.
B) sum to exactly one.
C) sum to less than one.
D) sum to more than one.
E) be equal to the multiplier.