In the graph for the consumption function, the 45-degree line
A) contains only a consumption component.
B) represents both planned consumption and planned investment.
C) shows various combinations where planned consumption equals real disposable income.
D) reflects a decreasing APC as real disposable income rises.
C
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The difference between net public debt and gross public debt is
A) all government interagency borrowing. B) the interest paid annually on the public debt. C) the amount owed to individuals and firms outside the United States. D) the current year's budget deficit from the amount of public debt at the start of the year.
Refer to the following diagram.
A decline in U.S. housing prices, as in 2007, pushed the AD curve from AD1 to AD2. Dynamic feedback effects that would destabilize the economy could shift:
A. SAS1 to SAS2. B. AD2 to AD1. C. SAS2 to SAS3. D. AD2 to AD3.