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1 April, 16:38

How would an increase in each of the following affect the consumption function

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  1. 1 April, 16:57
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    I had that same exact question on my test, and here are the answers to the A B C D

    a. negative, high tax, low consumption.

    b. negative, high interest rate, low consumption.

    c. positive, high confidence, high consumption.

    d. negative, high price, low consumption.

    The saving function = Income - Consumption. You do the math. High consumption, low saving.
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