What is the distinction between a movement along the consumption function and a shift of the consumption function?
a. A movement along the consumption function is caused by a change in income and a shift of the consumption function is caused by a nonincome determinant.
b. A movement along the consumption function is caused by a change in interest rates and a shift of the consumption function is caused by an income determinant.
c. A movement along the consumption function is caused by a change in net wealth and a shift of the consumption function is caused by an income determinant.
d. There is not distinction between the two, they are the same movement.
a
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Everything else held constant, in the market for reserves, when the federal funds rate is 3%, lowering the discount rate from 5% to 4%
A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
A decrease in demand will cause a decrease in price, which will cause a decrease in supply
a. True b. False Indicate whether the statement is true or false