Consider the Consumption Function in a Simple Macro Model with No

question 41

Multiple Choice

Consider the consumption function in a simple macro model with no taxes.At the level of national income where APC = 1,the nation's households are

• A)consuming all of their disposable income.
• B)allocating their income equally between saving and consumption.
• C)saving a portion of their income,but saving is less than consumption.
• D)spending more than their current income.
• E)saving all of their disposable income.

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Definitions:

Projected Level

An estimate of future levels of a variable, such as sales or income, based on current trends and assumptions.

Increased Efficiency

Enhancements in productivity and performance, often achieved through improved processes or technologies, leading to reduced costs and increased outputs.

Cash Flow

The total amount of money being transferred into and out of a business, especially considered when assessing liquidity and financial stability.

Operating Activities

The day-to-day actions that are involved in running a business, typically involving production, sales, and delivery of a company's product or service.