With disposable income, households will save and consume portions of it. Hence, the national disposable income comes from Consumption and Savings.

Question 1 options:

a.True

b.False

Question 2(1 point)

Show how the following will affect the Consumption and Savings curve (shift up, shift down).

If a household borrows, the consumption curve will _________________ and their savings curve will ____________________.

Question 2 options:

a.shift down, shift down

b.shift up, shift up

c.shift down, shift up

d.shift up, shift down

Question 3(1 point)

Show how the following will affect the Consumption and Savings curve (shift up, shift down).

If the interest rates decrease, the consumption curve will ____________________ and their savings curve will_____________________.

Question 3 options:

a.Shift up, shift up

b.Shift up, shift down

c.Shift down, shift down

d.Shift down, shift up

Question 4(1 point)

Show how the following will affect the Consumption and Savings curve (shift up, shift down).

If the government implements an increase in taxes, the consumption curve will __________________ and their savings curve will _________________________.

Question 4 options:

a.shift down, shift up

b.shift up, shift down

c.shift down, shift down

d,shift up, shift up