The slope of the consumption function is equal to
A) the change in national income divided by the change in consumption.
B) the change in disposable income divided by the change in consumption.
C) the change in consumption divided by the change in personal income.
D) the change in consumption divided by the change in disposable income.
D
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Renee consumes pizza and rice. An increase in her income causes her to consume fewer pizzas and more rice. The change in pizzas consumed means that
A) her total utility from consuming pizzas had been negative. B) her marginal utility from consuming pizzas had been negative. C) her marginal utility from consuming pizzas had been zero. D) pizza is an inferior good for Renee.
Deviations from PPP
A) may be due to the differential speed of adjustment between exchange rates and prices. B) may occur when international trade involves lags between order and delivery. C) may appear during periods dominated by news or unexpected events. D) All of the above.