If Disposable Income Falls by $60 Billion and Consumption Falls

question 134

Multiple Choice

If disposable income falls by $60 billion and consumption falls by $30 billion, then the slope of the consumption function is:

• A)1.33.
• B)0.5.
• C)0.3.
• D)0.75.

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Definitions:

Credit

A mutual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date with terms specified.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership portion of a company's assets.

Asset

Resources owned or controlled by a company, expected to provide future economic value or benefits.

Owner's Capital

The amount of money and other assets owned by a business's owner after all liabilities have been deducted; also known as owner's equity.