Which of the following statements is not true about the consumption function?
A. It shows how consumption is influenced by disposable income.
B. The equation is written as C = a + bYD.
C. It indicates that consumption is inversely related to disposable income.
D. It indicates the rate of consumer spending that will take place at various disposable income levels.
Answer: C
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Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor)
What is the average product of labor? A) AP = 5 B) AP = 5K C) AP = 5L D) AP = 5K/L
If the real risk-free interest rate falls, the:
a. Demand curve for real loanable funds rises. b. Demand curve for real loanable funds falls. c. Supply curve of real loanable funds rises. d. None of the above.