An Increase in the Wealth of Households, All Other Things

question 194

Multiple Choice

An increase in the wealth of households, all other things unchanged, will

• A) not affect the consumption function.
• B) shift the consumption function upward.
• C) shift the consumption function downward.
• D) cause a movement to the right along the consumption function.

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Definitions:

Excess Space

Excess space refers to the additional or unused space within a property or facility that exceeds the current needs of the occupants or users.

Materiality Constraint

An accounting principle that allows for the exclusion of insignificant financial information from reports because it would not impact decision-making.

Accounting Information

Data related to financial transactions and status of a business, used for analysis, decision making, and financial reporting.

Ending Retained Earnings

The amount of net income left over for the business after it has paid out dividends to its shareholders, captured at the close of an accounting period.