An Increase in the Propensity to Save from 0

question 4

Multiple Choice

An increase in the propensity to save from 0.36 to 0.56 will cause:

• A) the ZZ line to become flatter and a given change in autonomous spending (c0) to have a smaller effect on output.
• B) the ZZ line to become steeper and a given change in autonomous spending (c0) to have a smaller effect on output.
• C) the ZZ line to become flatter and a given change in autonomous spending (c0) to have a larger effect on output.
• D) the ZZ line to become steeper and a given change in autonomous spending (c0) to have a larger effect on output.
• E) the ZZ line to become flatter and a given change in autonomous spending (c0) to have no effect on output.

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Definitions:

Reciprocity

A social norm that involves exchanging goods, services, favors, or other forms of value in a mutual manner.

Self-Disclosure

The act of revealing personal information about oneself to others.

Bystander Effect

The phenomenon whereby individuals are less likely to offer help to a victim when other people are present, often due to a diffusion of responsibility.

Social Psychologists

Researchers who study how individuals think about, influence, and relate to one another within the context of society.