Along the consumption function, an increase in disposable income will:
a. cause autonomous consumption to rise
b. shift the consumption function upward.
c. cause a corresponding downward shift of the saving function.
d. cause a movement along the given consumption function.
e. shift the consumption function downward.
d
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Refer to Figure 5-12. One way to obtain the economically efficient amount of college education is for governments to subsidize college education
What is the size of the per-student Pigovian subsidy that the government must provide to internalize the external benefits? (Note that the subsidy can be granted to the education institutions or to the students directly or indirectly; for example, through low-interest student loans.) A) P2-P1 B) P1 C) P2-P0 D) P0-P1
What method of financing government spending leads to the least crowding-out?
A) Money creation B) Taxation C) Selling bonds to the public D) Selling government assets, like national parks