During a Recession, Consumers May Want to Save More to Provide

question 89

Essay

During a recession, consumers may want to save more to provide themselves with a reserve to cushion possible job losses. Use the Keynesian model to describe the impact of an exogenous decrease in consumption (a decrease in
C) on the equilibrium level of income in the economy. Will aggregate national saving increase?

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Definitions:

Goal Commitment

The determination or resolve an individual has to achieve a set goal, despite obstacles or difficulties.

Expected Rewards

Anticipated benefits or returns that motivate individuals towards performing certain actions or behaviors.

Satisfied Committed

A state where individuals feel content with their achievements or status and are dedicated to their roles or responsibilities.

Organization Presents

A phrase that seems to be missing context or is incorrect; without further context, it appears to be not a real key term.