Which of the following will shift the consumption function upward?
a. A tax increase.
b. Higher capacity utilization rates.
c. Higher disposable income.
d. Lower wealth holdings.
e. Expectations of inflation.
e
You might also like to view...
The interest rate on some Brazilian bank accounts is 700 percent per year. If you put 1 Brazilian real (Brazil's currency) in a bank today, it will be worth 8 reals next year! Why then don't we all wire our U.S. dollars to Brazilian banks? a. The Brazilian government keeps the exchange rate fixed during the year, which wipes out your financial gain
b. The Brazilian balance of payments becomes negative, which results in higher taxes, much of it from your financial gain. c. The U.S. government prohibits U.S. investment in foreign financial institutions. d. People engaging in arbitrage will quickly adjust the rates to make the Brazilian interest rate no more attractive than U.S. interest rates. e. The exchange rate reals per dollar adjusts during the year so that you are no better off once you convert your reals back into dollars.
Suppose the world was on the gold standard. If Japan ran persistent trade surpluses,
A. Japan's money supply would increase. B. Japan would experience inflation. C. Japan's exports would fall. D. All of the choices are true.