Which one of the following will shift the consumption function upward?
a. Higher interest rates.
b. Expectations that the economy will grow in the future.
c. A decrease in money holdings.
d. Higher capacity utilization rates.
e. A tax increase.
b
You might also like to view...
Assume the First Bank of Townsville makes a loan of $2,500. This loan will
A) increase the First Bank of Townville's liabilities at the Fed. B) have no change on the quantity of money, just its composition. C) increase the First Bank of Townville's reserves. D) increase the quantity of money initially by $2,500. E) decrease the quantity of money initially by $2,500.
Grace consumes two goods: iced tea and spaghetti. The price of iced tea is $2 per bottle. Her income is $500 per month. Grace spends all her income each month. She purchases 50 bottles of iced tea and 100 servings of spaghetti. What is the price of a serving of spaghetti?
a. $10 b. $5 c. $4 d. $2