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- What is the mariginal propensity to consume? Can the mariginal propensity to consume be grreater than 1? Explain.The consumption demand function merely states that as income goes up, households consume all their increased incomeWhat is it mean by full price and income when discussing household consumption?
- Draw the consumption function as the relation of the consumer's income and expenditure. What does the slope of the consumption function depend on? Is the consumer's income the only factor determining the level of his consumption spending?please explain this dynamic multiplier graph that givenExplain the term random walk in consumption. Under what conditions will consumption follow such a behaviour?.
- What are the nonincome determinants of Consumption and Savings?A short article in the January 10, 2011 edition of The New York Times discussed the amount spent on DVDs over the past six years: (In 2004) consumers spent about $21.8billion to rent and and buy DVDs, Blu-ray discs, digital downloads and other forms of home entertainment...The number has fallen every year since, for a total drop of about 13.8 percent, to $18.8 billion in 2010. The reporter noted that the actual drop was about double what it seemed to be when the figures were adjusted for inflation: $21.8 billion figure from 2004 would amount to $25.3billion in current dollars. The article also noted that box office revenues rose from $9.3billion in 2004 to $10.6 billion in 2010. Calculate the percentage increase in box office revenues, then re-calculate the percentage increase using inflation-adjusted dollars. Have box office revenues increased or decreased over this six-year time period?if we are studying the relationship .4 between consumption (C) and disposable income (Yd), wealth (W) then we reach the following results Ci=20+ 0.75*Ydi + 0.01*Wi if Ydi=1000, wealth =10000 and disposable income Yd increase by 100 then consumption will change * ???????????????by
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