The Positive Slope of the Consumption Function Indicates That

question 296

Multiple Choice

The positive slope of the consumption function indicates that

• A) consumers spend less out of each extra dollar of income.
• B) the amount of household wealth is subject to change.
• C) when prices fall consumers spend more.
• D) consumers increase their total consumption expenditure when disposable income increases.

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Definitions:

Islands Formation

The process by which islands are created, often through volcanic activity, sediment deposition, or coral reef buildup.

Pacific Ocean

The largest and deepest of the world's ocean basins, extending from the Arctic in the north to the Southern Ocean in the south.

Seafloor Spreading

The process by which new oceanic crust is created at mid-ocean ridges as tectonic plates diverge, allowing magma from the mantle to cool and solidify.

Lesser Antilles

A chain of smaller islands stretching from the Virgin Islands to Trinidad and Tobago, separating the Caribbean Sea from the Atlantic Ocean.