Why would consumer decrease consumption even if their disposable income has not changed?
What will be an ideal response?
If consumers start worrying about the future and decide to save more, they will decrease c0 and hence consumption. This is what happened at the start of the most recent financial crisis.
Economics
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What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages
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If the elasticity of demand for sugar cookies is 2.5, then a 10% change in price will lead to a 5% change in quantity demanded.
Answer the following statement true (T) or false (F)
Economics