Consider the Aggregate Consumption Function in a Simple Macro Model

question 81

Multiple Choice

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

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Definitions:

Best-subsets Regression

A statistical method that involves analyzing all possible combinations of variables to identify the model that best fits the data.

Independent Variables

Variables in an experiment or model that are manipulated or changed to assess their effects on dependent variables.

Dependent Variables

Variables in an experimental setup that respond or change due to manipulations in the independent variables.

Best-subsets Regression

A statistical method in regression analysis that evaluates all possible combinations of variables to identify the model that best fits the data.