Why does an increase in the price level tend to cause the consumption function to shift downward?
a. An increase in the price level decreases disposable income.
b. An increase in the price level increases the demand for fixed money assets.
c. An increase in the price level decreases the value of fixed money assets.
d. An increase in the price level decreases saving and increases debt.
c
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When the CPI rises ________, the inflation rate is ________
A) rapidly; low B) rapidly; high C) steadily; zero D) slowly; high E) rapidly; either high, low, or zero depending on whether production of output is increasing, decreasing, or not changing.
According to institutionally-focused economists:
A. there is no relationship between PQ and MV because Q isn't constant. B. there is no relationship between PQ and MV because V is constant. C. the direction of causation goes from PQ to MV. D. the direction of causation goes from MV to PQ.