Consider the Impact of an Increase in Thriftiness in the Keynesian-Cross

question 93

Multiple Choice

Consider the impact of an increase in thriftiness in the Keynesian-cross analysis. Assume that the marginal propensity to consume is unchanged, but the intercept of the consumption function is made smaller so that at every income level saving is greater. This will:

• A) increase saving by the decrease in the intercept.
• B) lead to no change in saving.
• C) decrease saving by the decrease in the intercept.
• D) lead to an increase in investment.

---

Definitions:

Ethical Principles

Fundamental concepts that guide moral behavior and decision-making, such as honesty, fairness, responsibility, and respect for others.

Economic Efficiency

A state where resources are allocated in a way that maximizes the production of goods and services at the lowest cost, optimizing welfare or profit.

Consumer Protection

Laws and regulations intended to safeguard buyers of goods and services from unfair, deceptive, or harmful practices by sellers.

Whistle-blower

An individual who exposes illegal, unethical, or wrong practices within an organization to the public or to authorities.