Exam 18: Consumption and Saving

The observation that changes in an economic variable are unpredictable suggests that the relevant variable follows ________.

Real world economic data supports the view that higher interest rates are associated with ________.

How consistent is the Keynesian consumption function with the random walk hypothesis?

The marginal propensity to consume describes ________.

The after-tax income received by the household sector is known as ________.

According to the life-cycle hypothesis ________.

Autonomous consumption is 700 and the marginal propensity to consume is 0.6. Calculate the average propensity to save when disposable income is (a) 10,000, (b) 12,000, and (c) 15,000.

________ is to the random walk hypothesis as ________ is to behavioral economics.

The permanent income hypothesis highlights the phenomenon of ________.

The optimal level of consumption is achieved when ________.

The ratio of consumption to income is known as ________.

A theory of saving is necessarily a theory of consumption, because ________.

Consumers who do not consistently discount the future over time are likely to ________.

The Keynesian consumption function does not display consumption smoothing, because ________.

The view that the choices consumers face should be limited for their own good is known as ________.

According to the permanent income hypothesis, permanent income is to ________ as transitory income is to ________.

Typically, consumers respond to an increase in (expected) future income by ________.

Which of the following is the correct statement of an intertemporal budget constraint?

The schedule describing the Keynesian consumption function will become steeper with an increase in ________.

The theory of intertemporal choice, and the life-cycle and permanent income hypotheses have in common the assumption that ________.