Use the line mover tool to illustrate the effect of a decrease in consumer income expectations on the consumption (C) and savings (S) function. 500 400 350 200 150 100 50 188888888 0 C 50 100 150 200 250 300 350 400 450 500 Real Dispesatie Income (D) 500 450 400 300 Real Savings 300 250 150 100 50 6 -100 -450 C=DI D C 50 100 150 200 250 300 350 400 450 500 (0) Fie Depest Choose the answer that best explains the relationship between the consumption function and the savings function Shifts in the consumption function will be reflected by a change in the marginal propensity to consume, or MPC. Shifts in the consumption function will be mirrored by shifts in the savings function. There is a positive relationship between O shifts in the consumption and savings functions. There is not a predictable relationship O between the consumption function and the savings function.

Use the line mover tool to illustrate the effect of a decrease in consumer income expectations on the consumption (C) and savings (S) function. 500 400 350 200 150 100 50 188888888 0 C 50 100 150 200 250 300 350 400 450 500 Real Dispesatie Income (D) 500 450 400 300 Real Savings 300 250 150 100 50 6 -100 -450 C=DI D C 50 100 150 200 250 300 350 400 450 500 (0) Fie Depest Choose the answer that best explains the relationship between the consumption function and the savings function Shifts in the consumption function will be reflected by a change in the marginal propensity to consume, or MPC. Shifts in the consumption function will be mirrored by shifts in the savings function. There is a positive relationship between O shifts in the consumption and savings functions. There is not a predictable relationship O between the consumption function and the savings function.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Each term (3 months) the current group of economics students completed a questionnaire as to how much they would spend on new purchases compared to how much they would save/pay off bills, if they suddenly and unexpectedly received a check for $1,000. The average MPC is shown in the table below. Month in which student poll was taken Average of students’ responses as MPC March 0.41 June 0.30 September 0.22 December 0.56 What do these MPC’s imply about the students’ thinking over the course of the year? (Enter response here.) What is likely happening in the economy during the same period of time?
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