For all the questions below select the appropriate answer:

Question 5 [5 points] For all the questions below select the appropriate answer: a) Investment expenditure is: O expenditure by business on currently produced buildings, equipment and inventories. O a component of autonomous aggregate expenditure. 0 more volatile relative to real income than consumption expenditures by households. 0 all of the above. b) If the consumption function for a closed economy with no government is C = 250 + 0.75Y: O the multiplier is 4. O the multiplier is 1/0.75. O the marginal propensity to consume is 0.25. O the marginal propensity to save is 1/0.75. c) Other things remaining the same, if households suddenly decide to save more at each level of income, then the consumption function will: 0 make a parallel shift downward as autonomous consumption expenditure falls. 0 remain unchanged but the savings function will shift downward. 0 become steeper because the marginal propensity to consume (MPC) falls. 0 become less steep because the marginal propensity to save (MPS) rises. d) Table 1. GDP (Y) Consumption (C) Saving (S) Investment (I) SO $60 S -60 $100 100 120 - 20 100 200 180 20 100 300 240 60 100 400 300 100 100 500 360 140 100 Based on the information presented in the table, the equation representing the consumption for the economy is: O C = 60 + 0.6Y O C = 60 O C = - 60 + 0.4Y O C = 300 e) According to the consumption function, as real disposable income increases: O consumption will rise by more than the rise in disposable income as saving falls. O consumption will remain constant but saving will rise. O consumption will rise by the same amount as the increase in disposable income. O consumption will rise by less than the rise in disposable income