When C = C0 + C 1YD, an Increase in C0

question 38

Multiple Choice

When C = c0 + c 1YD, an increase in c0 will cause which of the following to increase?

• A) Consumption.
• B) Equilibrium disposable income.
• C) Equilibrium income.
• D) Demand.
• E) All of the above.

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Definitions:

Tacit Understanding

An implicit agreement or understanding that is not formally expressed or written, but is assumed to be shared among the parties involved.

Informal Collusion

A scenario where businesses unofficially agree to certain practices, such as price-setting or market-sharing, without formal agreement, often to reduce competition.

Cartel

A cartel refers to an association of independent businesses or countries that collaborate to manipulate prices and limit competition for certain goods or services.

Cartel

An agreement between competing firms to control prices or exclude entry of a new competitor in a market, usually to increase market power and profits.