Which of the following statements is true?
A) A change in government purchases affects income.However, the change in income does not affect consumption.
B) A change in government purchases does not affect income or consumption.
C) A change in government purchases affects GDP, which is the same as income.The change in income affects consumption.
D) A change in government purchases affects GDP but not income.
E) A change in government purchases has no effect on GDP, but it does affect consumption.
Correct Answer:
Verified
Q90: Interest rates do not affect consumption.
Q91: Exhibit 23-4 Q92: If firms decide to decrease their purchases Q93: Define the marginal propensity to consume. Graphically, Q94: The consumption relationship in this chapter assumes Q96: If foreigners decide to increase their purchases Q97: The consumption function is a straight-line relationship Q98: To understand how a change in government Q99: The marginal propensity to consume is best Q100: Does it make a difference whether disposable
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents