"Suppose an economy with output at the natural level and there is an increase in consumer confidence, so consumers decide to consume more for any level of disposable income. We can say that (Hint: Remember that the medium-run effect is the whole change from the initial to the final medium-term equilibrium)" (A) Private saving decreases in the short and in the medium-run. (B) Private saving increases in the short and decreases in the medium-run C) Private saving increases in the short and remains constant in the medium-run. D) Private saving decreases in the short and increases in the medium-run.
"Suppose an economy with output at the natural level and there is an increase in consumer confidence, so consumers decide to consume more for any level of disposable income. We can say that (Hint: Remember that the medium-run effect is the whole change from the initial to the final medium-term equilibrium)" (A) Private saving decreases in the short and in the medium-run. (B) Private saving increases in the short and decreases in the medium-run C) Private saving increases in the short and remains constant in the medium-run. D) Private saving decreases in the short and increases in the medium-run.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:"Suppose an economy with output at the natural level and there is an increase in consumer confidence, so consumers decide to
consume more for any level of disposable income. We can say that (Hint: Remember that the medium-run effect is the whole
change from the initial to the final medium-term equilibrium) "
(A) Private saving decreases in the short and in the medium-run.
(B) Private saving increases in the short and decreases in the medium-run
C) Private saving increases in the short and remains constant in the medium-run.
(D) Private saving decreases in the short and increases in the medium-run.
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