Which One of the Following Will Shift the Consumption Function

question 216

Multiple Choice

Which one of the following will shift the consumption function upward?

• A)Higher interest rates.
• B)Expectations that the economy will grow in the future.
• C)A decrease in money holdings.
• D)Higher capacity utilization rates.
• E)A tax increase.

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Definitions:

Common Stock

This represents ownership shares in a corporation, giving shareholders voting rights and a claim on a portion of the company's profits in the form of dividends.

Additional Paid-In Capital

The amount of money paid by investors for shares of stock above their par value; it is a measure of the excess investment made by shareholders.

Journal Entries

Recorded business transactions in the accounting records of a company, following the double-entry bookkeeping principle.

Note Payable

A written agreement whereby the borrower agrees to pay a certain sum of money to the lender at a future date.