Real Consumption Is a Function of Real Disposable Income, but the Simple

question 222

Multiple Choice

Real consumption is a function of real disposable income, but the simple Keynesian model uses real GDP instead of real disposable income. This is appropriate since

• A) real disposable income tends to move proportionately with real GDP.
• B) real disposable income is a fixed percentage of real GDP.
• C) real GDP is a fixed percentage of real disposable income.
• D) we cannot measure either exactly and the purpose of the exercise is theoretical only.

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Definitions:

Correct Abbreviation

A shortened form of a word or phrase used correctly in a specific context.

Vasopressin

A hormone released by the pituitary gland that regulates water retention in the kidneys and increases blood pressure.

Hyposecretion

A condition where a gland produces less of its hormone than the normal level, potentially leading to various disorders or symptoms.

T₄

Also known as thyroxine, it's a hormone produced by the thyroid gland that plays a crucial role in metabolism and energy regulation.