Model of the communication process:

The change in consumption divided by a change in income is called the:

a. consumption function. b. marginal propensity to consume. c. marginal propensity to spend. d. spending function. e. changing propensity to consume.

Which of the following events could explain an increase in interest rates together with an increase in investment?

a. The government runs a larger deficit. b. The government institutes an investment tax credit. c. The government replaces the income tax with a consumption tax. d. None of the above is correct.