The consumption function shows the relationship between:
a. planned consumption expenditures and disposable income.
b. permanent income and savings.
c. business inventory and real GDP.
d. aggregate demand and aggregate consumption.
a
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Consider the following statements when answering this question. I. As Boeing's production fell 10% to 100 planes last year, learning by doing cannot account for this year's changes in long-run average costs. II
Failure to take into account the effects of learning by doing will lead to overestimates of the cost-output elasticity. A) I is true, and II is false. B) I is false, and II is true. C) Both I and II are true. D) Both I and II are false.
Assume the U.S. government wants to hold the value of the dollar at $1.00 U.S. equals 7 Chinese yuan, but it finds that the value of yuan is depreciating against the U.S. dollar. What would be an appropriate policy to reverse this trend?
A. Increase the money supply in the U.S. B. Increase government spending within the U.S. C. Sell U.S. dollars. D. Buy U.S. dollars.