Consumption expenditure (trillions of 2012 dollars)12+1086420CF₁36912Disposable income (trillions of 2012 dollars)Note: If the image does not appear, click here for a PDF version.an increase in the real interest rateCFOan increase in disposable incomean increase in wealthan increase in expected future incomea decrease in disposable incomeCF₂Refer to the Figure above. Which of the following events could result inthe consumption function shifting from CFO to CF2?

Refer to the figure above, which of the following events could result in the consumption function…

Answered: 12 10- 8 6 4 2 0 tion expenditure Tons…

Business

Economics

12 10- 8 6 4 2 0 tion expenditure Tons of lars) CF₁ CFO CF2 3 6 9 12 Disposable income (trillions of 2012 dollars)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter23: The Aggregate Expenditure Model

Section: Chapter Questions

Problem 1P

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Question

Consumption expenditure (trillions of 2012 dollars)
12+
10
8
6
4
2
0
CF₁
3
6
9
12
Disposable income (trillions of 2012 dollars)
Note: If the image does not appear, click here for a PDF version.
an increase in the real interest rate
CFO
an increase in disposable income
an increase in wealth
an increase in expected future income
a decrease in disposable income
CF₂
Refer to the Figure above. Which of the following events could result in
the consumption function shifting from CFO to CF2?

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