Consider a Consumption Function That Is Upward Sloping but Flatter

question 58

Multiple Choice

Consider a consumption function that is upward sloping but flatter than the 45-degree line.When real disposable income rises,

• A)desired consumption will fall and saving will rise.
• B)desired consumption will rise and saving will fall.
• C)desired consumption and saving will both rise.
• D)desired consumption remains constant.
• E)saving remains constant.

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Definitions:

General Adaptation Syndrome (GAS)

A three-stage response pattern to stress described by Hans Selye, consisting of alarm, resistance, and exhaustion stages.

Arousal Stage

A phase in psychological and physiological response that involves increased alertness, energy, and readiness for action.

General Adaptation Syndrome

A model describing the body's short-term and long-term reactions to stress, consisting of three stages: alarm, resistance, and exhaustion.

Adrenal Glands

A pair of endocrine glands that release hormones that prepare the body for emergencies and stressful situations and also release corticoids and small amounts of the sex hormones.