Solution-What is the major determinant of consumption

What is the major determinant of consumption behavior

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If equilibrium is so important in the simple expenditure model, how will the economy signal to us that we are not in equilibrium?
Show on a graph of the consumption function where we can find the level of saving behavior.
What is the major determinant of consumption behavior in the expenditures model of GDP? What is the resulting linear equation for the consumption relationship?
If the percentage of income saved rises, what, if anything, must happen to the percentage of income spent? Why?
Assume that the level of autonomous consumption rises. Show in a graph what happens to the consumption function.
Assume that the size of the MPC falls. Show in a graph what happens to the consumption function.

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What is the major determinant of consumption behavior

Reference no: EM132405757

Reference no: EM132405757

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