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What is the proponsity to consumption function?
explain with formulae of average propensity to consume in micro economy.
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- a) With the aid of a consumption function, highlight the main determinants of consumption.What is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption lineState 3 characteristic of the consumption function ?
- The Average Propensity to Consume is: A. the percentage of disposable income that is consumed B. the percentage of disposable income that is saved C. the percentage of disposable income that is spent D. the percentage of disposable income that is investedUse the following consumption schedule to answer the next question. At income level 3, the amount of saving is represented by the line segment: Consumption A B 45° C 1 O Multiple Choice FD. 3 Disposable Income FH. GH. m O FG. 2 G HExplain the determinants of investment. Include in your answer an explanation of how a change in each determinant affects investment.
- Smoothing consumption and income are motivations for several actions that individuals take- saving, borrowing, lending, investment... it is also an optimal individual choice to overcome the impacts of unemployment and recession. Write an essay on the role, importance and methods of consumption (and income) smoothing in the study of macroeconomics. You may use figures, diagrams and tables to suppprt your answer.ate the three possible relationships between production, income and spending in macroeconomic theoryWho gave the relative income hypothesis of consumption?
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