The vertical intercept of the consumption function equals ________ and the slope equals ________.
A. autonomous consumption; the MPC.
B. the planned component of consumption; the unplanned component of consumption.
C. the unplanned component of consumption; the planned component of consumption.
D. the MPC; autonomous consumption.
Answer: A
You might also like to view...
A decrease in demand will increase total revenue: a. Always
b. Only if supply is relatively inelastic. c. Only if supply is relatively elastic. d. Never.
According to Friedman's permanent income hypothesis, which of the following statements about transitory income is true?
a. It reflects the unexpected gains of income are transitory income. b. It reflects the income of people who have temporary employment. c. People's consumption depends on transitory income. d. It reflects the income of retired people. e. Habitual losses (or gains) at gambling are transitory income.