Which of the following would be expected to shift the consumption function up?
A) decreases in wealth B) increases in the nation's population
C) expectations of harder times ahead D) changes in real disposable income
B
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By the permanent-income hypothesis, for every dollar that actual income increases, consumption expenditure rises in the short run by ________ dollars
A) kj B) k + j C) k/j D) k - j E) j + (1/k)
Which of the following most accurately describes the behavior of the U.S. economy during the 2001 recession?
A) Aggregate demand fell as business investment declined while aggregate supply rose as a result of continued productivity growth. B) Aggregate demand fell primarily as a result of reduced consumption while aggregate supply increased due to continued growth in productivity. C) Aggregate demand fell due to a reduction in business investment while aggregate supply declined due to a reduction in productivity. D) Aggregate demand fell due to the bursting of the housing bubble while aggregate supply fell due to slower productivity growth.