Which of the Following Statements About Consumption and Investment Is

question 66

Multiple Choice

Which of the following statements about consumption and investment is correct?

• A)Consumption is more volatile than investment.
• B)Investment and consumption exhibit approximately the same degree of volatility.
• C)A permanent change in income will have a relatively larger effect on consumption than on investment.
• D)none of the above

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Definitions:

Demand Curve

Illustrates the relationship between the price of a good or service and the quantity demanded by consumers, typically showing a downward slope.

Fringe Firms

Small companies that operate at the edges of a market, often providing alternative or innovative products compared to mainstream companies.

Profit Maximizing

The process or strategy of adjusting production and sales to achieve the highest possible profit.

Marginal Cost

The augmentation in total expenditure resulting from the manufacture of one more unit of a product or service.