The ________ approach relies on the right discretionary policy to close the gap through a ________ of the aggregate demand curve

In the range of disposable income where the consumption function lies above the 45° line,

A) disposable income is negative. B) saving is negative. C) disposable income equals planned expenditures. D) induced consumption is zero. E) saving is positive.

A possible solution to errors-in-variables bias is to

A) use log-log specifications. B) choose different functional forms. C) use the square root of that variable since the error becomes smaller. D) mitigate the problem through instrumental variables regression.