Figure 8-1

-Given the scatter diagram in Figure 8-1, if real disposable income is $600 billion and asset wealth increases by $100 billion, how much will consumers spend?
A)$550 billion
B)$450 billion
C)$600 billion
D)Cannot be determined

Question

Figure 8-1
​ 
-Given the scatter diagram in Figure 8-1, if real disposable income is $600 billion and asset wealth increases by $100 billion, how much will consumers spend?
A)$550 billion 
B)$450 billion 
C)$600 billion 
D)Cannot be determined

Quizplus · Accepted Answer

The scatter diagram shows that when real disposable income is $600 billion, consumers spend about $550 billion. When asset wealth increases by $100 billion, consumers will spend about $100 billion more, or $650 billion. However, the scatter diagram also shows that there is a negative relationship between asset wealth and consumer spending. This means that as asset wealth increases, consumer spending decreases. Therefore, the correct answer is A, $550 billion.

Figure 8-1 ​

Figure 8-1