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QUESTION 5 Consider the following economic model: C = { r, y, INV, P } Where C = Consumption spending on goods and services, r
QUESTION 5 Consider the following economic model: C = { r, y, INV, P } Where C = Consumption spending on goods and services, r = interest rates, y = consumer income, INV = investments and P = Prices Question: An economist predicts that as INV increases, C increases. According to the Ceteris Paribus Assumption, O C and INV remain constant O C, r and Y remain constant O Y, p and INV remain constant O r, y and P reman constant
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