Which of the Following Would Shift the FE Line to the Left

question 51

Multiple Choice

Which of the following would shift the FE line to the left?

• A)a beneficial supply shock
• B)a decrease in labour supply
• C)an increase in the capital stock
• D)a decrease in the future marginal productivity of capital

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Definitions:

Autonomous C

Autonomous consumption, the level of spending not influenced by current levels of income.

Induced C

Induced consumption, which refers to the spending by households that varies with income levels.

Induced Consumption

Induced consumption is the portion of consumer spending that increases with income, implying that as people earn more, they tend to spend more.

Disposable Income

Available monetary resources for households post-income tax for spending and saving purposes.