Quiz

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

According to Keynes, which of the following equations represents the relationship between consumption and disposable income?

  • C = f(Y) (correct)
  • Y = f(C)
  • Y = C
  • C = Y

According to Keynes, what happens to consumption when disposable income increases?

  • Consumption decreases
  • Consumption increases (correct)
  • Cannot be determined
  • Consumption remains the same

According to Keynes, how does the rate of disposable income compare to the rate of consumption?

  • Rate of disposable income is greater than the rate of consumption (correct)
  • Rate of consumption is greater than the rate of disposable income
  • Cannot be determined
  • Rate of disposable income is equal to the rate of consumption

What is the term used to describe a person's marginal propensity to consume according to Keynes?

<p>Marginal propensity to consume (B)</p> Signup and view all the answers

According to Keynes, what does the equation C = f(Y) represent?

<p>Consumption as a function of disposable income (C)</p> Signup and view all the answers

Flashcards are hidden until you start studying

Study Notes

Consumption and Disposable Income

  • The relationship between consumption and disposable income is represented by the equation C = f(Y), where C is consumption and Y is disposable income.
  • When disposable income increases, consumption also increases, but not by as much as the increase in disposable income.
  • The rate of increase in consumption is less than the rate of increase in disposable income.
  • The marginal propensity to consume is the term used to describe a person's tendency to spend more as their disposable income increases.
  • The equation C = f(Y) represents the functional relationship between consumption and disposable income, showing that consumption is a function of disposable income.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

More Like This

Keynesian Consumption Function
5 questions
Keynesian Consumption Function
8 questions

Keynesian Consumption Function

JawDroppingSplendor8969 avatar
JawDroppingSplendor8969
Consumption Puzzle and Neoclassical Model
37 questions
Economics Chapter on Consumption Function
17 questions
Use Quizgecko on...
Browser
Browser