What Is the Effect on the Consumption Function of an Increase

question 26

Multiple Choice

What is the effect on the consumption function of an increase in disposable income?

• A)The consumption function shifts upward.
• B)The consumption function shifts downward.
• C)There is movement upward along the consumption function.
• D)There is movement downward along the consumption function.
• E)The consumption function becomes steeper.

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Definitions:

Normal Approximation

Normal approximation is a statistical technique that applies the properties of the normal distribution to approximate the distribution of sample data or statistics.

Standardized Test Statistic

A value computed from sample data and the null hypothesis that measures how many standard deviations the sample data falls from the hypothesized value.

Alternative Hypothesis

In statistical hypothesis testing, the hypothesis that suggests there is an effect or a difference, as opposed to the null hypothesis which suggests there is no effect or difference.

P-Value

The probability of obtaining test results at least as extreme as the results actually observed, assuming that the null hypothesis is correct.