Along the Consumption Function,an Increase in Disposable Income Will

question 58

Multiple Choice

Along the consumption function,an increase in disposable income will:

• A)cause autonomous consumption to rise.
• B)shift the consumption function upward.
• C)cause a corresponding downward shift of the saving function.
• D)cause a movement along the given consumption function.
• E)shift the consumption function downward.

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Definitions:

Unrealized Gain

Represents the increase in value of an investment or asset that has not yet been sold for cash.

Commercial Substance

A concept in accounting that a transaction has commercial substance if it significantly changes the economic circumstances of the entities involved.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Fair Value

A valuation method that approximates the amount for which an asset could be bought or sold in a current transaction between participants at arm's length.