An Increase in the Propensity to Consume from 0

question 47

Multiple Choice

An increase in the propensity to consume from 0.42 to 0.78 will cause:

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

---

Definitions:

Theory

A system of ideas intended to explain something, based on principles independent of the thing to be explained.

Observed Events

Events or occurrences that have been witnessed and possibly recorded for further analysis or study.

Testable Predictions

Hypotheses or conjectures that can be verified or falsified through experimentation, observation, or other empirical means.

Useful Theory

A theory that provides practical utility for understanding and predicting phenomena, facilitating problem-solving or decision-making processes.