Question 4(1 point)

Which of the following statements is true?

a

The fraction of D.I. that is not spent must be saved, and vice versa: APC + APS =1

b

Themarginal propensity to consume (MPC) is the

proportion of any additional D.I. that is saved.

c

Themarginal propensity to save (MPS) is the

proportion of any additional D.I. that is consumed.

d

All of the above.

e

Only a) and b)

Question 5(1 point)

Which of the following statements is true?

a

The fraction of any additional D.I. that is not spent must be saved, and vice versa: MPC + MPS =1

b

Disposable incomeis the main determinant of consumption (and saving).

c

Changes in nonincome determinants of C and S can make people change their consumption (and saving) at any given level of disposable income.

d

All of the above.

e

Only a) and b)

Question 6(1 point)

Which of the following statements is true?

a

Nonincome determinants of consumption include wealth, household debt, and expectations.

b

An increase in wealth shifts the consumption curve down and the saving curve up.

c

Lower debt levels (debt burden) shift the consumption curve up and the saving curve down.

d

All of the above.

e

Only a) and c)