The Consumption Function of the U

question 254

Multiple Choice

The consumption function of the U.S. economy from 1929 to 1941 is , where is the personal consumption expenditure and is the personal income, both measured in billions of dollars. Find the rate of change of consumption with respect to income, . This quantity is called the marginal propensity to consume.

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Definitions:

Malthusian Theorem

The theory that exponential growth in population will outpace arithmetic growth in food production and other resources.

Demographic Transition

A theory about change over time from high birth and death rates to low birth and death rates, resulting in a stabilized population.

Industrial Revolution

The rapid transformation of social life resulting from the technological and economic developments that began with the assembly line, steam power, and urbanization.

Mortality Rates

A statistical measurement of the number of deaths in a particular population, scaled to the size of that population, per unit of time.