On the graph of the consumption function, the horizontal axis measures vertical axis measures O A. real GDP; real aggregate expenditure OB. real consumption spending; real national income OC. real national income or real GDP; real consumption spending D. real disposable income; real national income The graph on the right shows a consumption function, C₁. The current income-consumption combination is shown by point A. while the Suppose the level of income increases. 1.) Use the point drawing tool or the line drawing tool (as appropriate) to show the impact of the increase in income. Label the new income-consumption combination 'B' or the new consumption function, if any, C₂. Suppose there is an increase in expected future income. 2.) Use the line drawing tool to show the impact of such an increase. Label the new consumption function C3. Carefully follow the instructions above, and only draw the required objects. 10,000 9,000- 8,000- 7,000- 6,000- 5,000- 4,000- 3,000- 2,000- 1,000- 0- 0 A 2,000 4,000 6,000 8,000 5 C₁ 10,000

On the graph of the consumption function, the horizontal axis measures vertical axis measures O A. real GDP; real aggregate expenditure OB. real consumption spending; real national income OC. real national income or real GDP; real consumption spending D. real disposable income; real national income The graph on the right shows a consumption function, C₁. The current income-consumption combination is shown by point A. while the Suppose the level of income increases. 1.) Use the point drawing tool or the line drawing tool (as appropriate) to show the impact of the increase in income. Label the new income-consumption combination 'B' or the new consumption function, if any, C₂. Suppose there is an increase in expected future income. 2.) Use the line drawing tool to show the impact of such an increase. Label the new consumption function C3. Carefully follow the instructions above, and only draw the required objects. 10,000 9,000- 8,000- 7,000- 6,000- 5,000- 4,000- 3,000- 2,000- 1,000- 0- 0 A 2,000 4,000 6,000 8,000 5 C₁ 10,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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