Consider the Following News Headline: "Increase in Consumer Confidence Leads

question 1

Multiple Choice

Consider the following news headline: "Increase in consumer confidence leads to increase in spending".Which of the following correctly describes the likely effect in our simple macro model?

• A)The consumption function shifts downward.
• B)The consumption function gets flatter.
• C)The AE function shifts upward.
• D)The consumption function shifts upward.
• E)Both C and D are correct.

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Definitions:

Member-Managed

Refers to a type of management structure in an LLC where all members participate in the decision-making processes.

Limited Liability Company

An enterprise configuration that amalgamates the individual taxation approach of sole proprietorships or partnerships with the capped liability advantages of a corporation.

Corporation

A legal entity that is separate and distinct from its owners, offering them limited liability and the ability to raise funds by selling shares.

Net Income

The profit remaining after all costs, expenses, and taxes have been subtracted from total revenue.