Following Is Consumption Schedules for Three Private Closed Economies

question 8

Multiple Choice

Following is consumption schedules for three private closed economies.DI signifies disposable income and C represents consumption expenditures.All figures are in billions of dollars.Refer to the data below.Suppose the consumption is increased by $2 billion in each of the three economies.This change could have been caused by:

• A)a decrease in consumer wealth.
• B)expectations of higher future income.
• C)an increase in taxation.
• D)an increase in saving.

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Definitions:

Monetary Unit Assumption

A financial accounting concept that believes transactions and events can be quantified in terms of money.

Dollar Stability

Refers to the consistency and steadiness in the value of the United States dollar in international and domestic markets.

Medium Of Exchange

An intermediary instrument used to facilitate the sale, purchase, or trade of goods between parties.

International Transactions

Cross-border exchanges between entities involving goods, services, or financial assets, which affect a country's economic activity.