When the Consumption Function Lies Below the 45° Line, Households

question 140

Multiple Choice

When the consumption function lies below the 45° line, households

• A)spend all of any increase in disposable income.
• B)consume more than their disposable income.
• C)are saving some portion of their disposable income.
• D)save all of any increase in disposable income.
• E)are dissaving.

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Definitions:

Peripheral Route

A method of persuasion that relies on cues outside of the message content itself, such as the attractiveness or credibility of the source.

Central Route

A method of persuasion that involves deeply processing the content of a message, focusing on the argument's quality.

Endorsing

The act of giving public approval or support to something or someone.

Cognitive Dissonance Theory

The psychological conflict resulting from incongruous beliefs and attitudes held simultaneously, leading to a state of mental discomfort that individuals strive to reduce.