What is Consumption function ? a. The model that determines the equilibrium level of real GDP by
Question:
What is Consumption function ?
a. The model that determines the equilibrium level of real GDP by the intersection of the aggregate expenditures and aggregate output (and income) curves
b. The graph or table that shows the amount households spend for goods and services at different levels of disposable income
c. The curve that shows the amount businesses spend for investment goods at different possible rates of interest
d. An index that measures changes in the average prices of consumer goods and services
e. The ratio of the change in real GDP to an initial change in any component of aggregate expenditures, including consumption, investment, government spending, and net exports. As a formula, the spending multiplier equals 1/(1-MPC) or 1/MPS.