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Consider the Consumption Function in Our Macro Model

Question 2

Multiple Choice

Consider the consumption function in our macro model.Which of the following statements is correct? The consumption function


A) and the aggregate expenditure function describe the same functional relationship.
B) describes the relationship between desired consumption expenditure and the factors that determine it,like national income.
C) refers to the relationship between consumption expenditure and relative prices.
D) refers to the relationship between an individual's consumption and his/her wealth.
E) is relatively unimportant in macroeconomics,because consumption is such a small component of aggregate expenditure.

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