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MMLU / If households are more optimistic about the future how would the consumption…

Problem

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question

If households are more optimistic about the future how would the consumption function be affected?

choices

  1. The marginal propensity to consume would increase increasing the slope of the consumption function.
  2. The entire consumption function would shift downward.
  3. The entire consumption function would shift upward.
  4. The marginal propensity to consume would decrease increasing the slope of the consumption function.

subject

high_school_macroeconomics

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Official source

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