Savings function and the investment demand function

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1. For each of the following two-variable relationships: i)the consumption function ii)the savings function iii)the investment demand function iv) the multiplier, indicate, a. the dependent variable b.the independent variable c. the nature of the relationship (+ or -)

2. Describe using a plus for an increase (+), a minus for a decrease (-), and an equal sign for remains the same (=) how each of the following events will affect the consumption function, savings function and investment function. Events: a. A large increase in the value of real estate, including private houses. b. A decline in the real interest rate. c. A sharp, sustained decline in stock prices. d. An increase in the rate of population growth. e.The development of a cheaper method of manufacturing computer chips. f. A sizable increase in the retirement age for collecting Social Security benefits.

Reference no: EM131165088

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