6.8 Which of the following statements are correct concerning consumption function? Consider the consumption function of country A: Country A: C = 2 000 + 0.7YD Which of the following statements concerning the consumption function are correct? Question 197 There is a positive relationship between consumption spending and interest rate. D) Younger households tend to have higher … B) The age of the population affects the slope of the consumption function. a) an increase in disposable income. (b) Net exports can never be negative. 49. b) an increase in wealth. b. [1] All the statements are correct. The consumption function is an equation that shows the relationship between disposable income and consumption, which is the spending by households on goods and services. (b) Net exports can never be negative. b) The Keynesian model cannot explain periods of prolonged unemployment. c) a fall in interest rate. Which of the following statements is true for real GDP levels below $400 billion? C) Other things equal, the level of consumption will rise with increases in population. Which of the following statement(s) is (are) true? (c) John Maynard Keynes is credited with the development of the consumption function as well as the notion of aggregate demand. a. 1) Autonomous consumption spending refers to the part of consumption spending which varies with income. The function introduced by British economist John Maynard Keynes indicates the relationship between income and expenditure and the proportion of income spent on goods. Which one of the following statements about the consumption function is incorrect? Consumption spending cannot be positive if income is zero. 3) The marginal propensity to save is 0,2. (a) Farm conditions in the United States would be improved if the U.S. were to discontinue all supplemental food programs. d) none of the above shift the consumption function upward Consumption spending increases as income increases. c. As income increases, consumption increases but less than increase in income. If autonomous consumption increases the marginal propensity to consume will increase. a) The classical model cannot explain periods of prolonged unemployment. (correct) 4) Induced consumption is equal to Y. Which one of the following statements is true? Consumption spending decreases as income decreases. (c) John Maynard Keynes is credited with the development of the consumption function as well as the notion of aggregate demand. The Fed would likely respond by increasing the supply of federal funds to keep the federal funds rate at its target level. B) Saving does not exist because consumption exceeds disposable income. C) The corresponding section of the consumption function … The consumption function is an economic formula that directly connects total consumption and gross national income. 2) The autonomous consumption is 10,8. 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