An Increase in Disposable Income

question 107

Multiple Choice

An increase in disposable income

• A) increases consumption because it shifts the consumption function upward.
• B) decreases consumption because it shifts the consumption function downward.
• C) increases consumption by moving upward along a specific consumption function.
• D) decreases consumption by moving downward along a specific consumption function.
• E) does not change consumption.

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Definitions:

Diffusion of Innovation

The method through which an innovation, item, or way of acting proliferates across a group or societal structure as time progresses.

Diffusion of Innovation

An idea focused on elucidating the processes, causes, and velocities at which new technologies and concepts proliferate across cultures.

Late Majority

A segment of a product adoption cycle referring to individuals who adopt new technology or products after the average member of society.

Diffusion of Innovation

A theory that explains how, why, and at what rate new ideas and technology spread through cultures, from early adopters to the broader population.