Suppose That the Consumption Function Crosses the 45-Degree Line at a Disposable

question 7

True/False

Suppose that the consumption function crosses the 45-degree line at a disposable income level of $800.Assume further that saving equals $200 when disposable income is $1, 300.This implies that the MPC must equal 0.6.

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Definitions:

Purposive Behavior

Behavior that is goal-directed or undertaken with a specific intention or objective in mind.

Tolman

A cognitive psychologist known for his work on latent learning and cognitive maps in rats, challenging behaviorist theories.

Pheromones

Chemical substances released by animals (including humans) that affect the behavior or physiology of others of the same species, often involved in attraction.

Chemical Signals

Molecules released by organisms that influence the behavior or physiology of others, fundamental in processes such as communication and mating.