An Upward Shift in the Consumption Function Can Be Caused

question 22

Multiple Choice

An upward shift in the consumption function can be caused by

• A) expectations of product shortages.
• B) expectations of less income in the future.
• C) a decrease in consumer confidence.
• D) a reduction in the wealth of households.

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Definitions:

Foreign Currency Option

A financial contract which grants the owner the option, without being obliged, to convert funds in one currency to another at a set exchange rate on a determined date.

Strike Price

The predetermined price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying asset or security.

Foreign Exchange Gain

A financial benefit that occurs when the value of foreign currencies increases compared to the home currency, affecting transactions or holdings in foreign currencies.

Dollar Value

The monetary worth or value of something expressed in terms of the U.S. dollar.