Consider the Following News Headline: "Increase in Consumer Confidence Leads

question 18

Multiple Choice

Consider the following news headline: "Increase in consumer confidence leads to increase in spending".Which of the following correctly describes the likely effect in our simple macro model?

• A)the consumption function shifts downward
• B)the consumption function gets flatter
• C)the AE function shifts upward
• D)the consumption function shifts upward
• E)both C and D are correct

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Definitions:

Conventional Theory

In electrical engineering, it refers to the theory that assumes current flows from the positive to the negative terminal, opposite to electron flow.

Electrical Current Flow

The movement of electric charge carriers, such as electrons, through a conductor or circuit, typically measured in amperes.

Atomic Number

The number of protons in the nucleus of an atom, which determines the chemical properties of an element.

Number of Protons

A fundamental characteristic of an element that defines its identity in the periodic table, equal to the atomic number.