The consumption function becomes flatter if:
a. the average propensity to spend increases.
b. the marginal propensity to spend increases.
c. the marginal propensity to save increases.
d. the autonomous consumption increases.
e. the autonomous consumption decreases.
c
You might also like to view...
If the exchange rate between the U.S. dollar and the Mexican peso (pesos per dollar) is less than the relative purchasing power between the two countries, which of the following would be true?
A) Purchasing power parity predicts that the dollar is overvalued as traders take advantage of arbitrage opportunities. B) Purchasing power parity predicts that the value of the dollar will fall as traders take advantage of arbitrage opportunities. C) There are opportunities for profit by purchasing goods in the United States and then selling them in Mexico. D) There are no arbitrage opportunities for which traders can take advantage.
If the interest rate received in Mexico is greater than that obtained in the United States,
A) the demand for loans will increase in Mexico. B) the supply of loans will decrease in the United States. C) the supply of loans will decrease in Mexico. D) the demand for loans will decrease in the United States.