3. Consumption function and non-income determinants The following graphs show an economy's initial position at point B along its consumption function C. Suppose disposable income suddenly and unexpectedly decreases. On the graph, shift either the C curve or the initial point on the C curve to show the impact of a fall in disposable income. Real Consumption Spending (Bitions of dollars) Disposable Income (Ballions of dollars) 1 COO с D Now suppose that there is an increase in the interest rate households are paid on money they save. On the following graph, shift either the C curve or the initial point on the C curve to show the impact of an increase in the intere

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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Now suppose that there is an increase in the interest rate households are paid on money they save.
On the following graph, shift either the C curve or the initial point on the C curve to show the impact of an increase in the interest rate.
Real Consumption Spending (Bitions of dollars)
D
Disposable Income (Belions of dollars)
C
Transcribed Image Text:Now suppose that there is an increase in the interest rate households are paid on money they save. On the following graph, shift either the C curve or the initial point on the C curve to show the impact of an increase in the interest rate. Real Consumption Spending (Bitions of dollars) D Disposable Income (Belions of dollars) C
Is
3. Consumption function and non-income determinants
The following graphs show an economy's initial position at point B along its consumption function C.
Suppose disposable income suddenly and unexpectedly decreases.
On the graph, shift either the C curve or the initial point on the C curve to show the impact of a fall in disposable income.
Real Consumption Spending (Bilions of dollars)
0
Disposable Income (Billions of dollars)
C
16
с
0
B
Now suppose that there is an increase in the interest rate households are paid on money they save.
On the following graph, shift either the C curve or the initial point on the C curve to show the impact of an increase in the interest
Transcribed Image Text:Is 3. Consumption function and non-income determinants The following graphs show an economy's initial position at point B along its consumption function C. Suppose disposable income suddenly and unexpectedly decreases. On the graph, shift either the C curve or the initial point on the C curve to show the impact of a fall in disposable income. Real Consumption Spending (Bilions of dollars) 0 Disposable Income (Billions of dollars) C 16 с 0 B Now suppose that there is an increase in the interest rate households are paid on money they save. On the following graph, shift either the C curve or the initial point on the C curve to show the impact of an increase in the interest
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