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- Empirical evidence suggests that consumers tend to spend all their current disposable income immediately. Is this irrational? ExplainWhat are the nonincome determinants of Consumption and Savings?Empirical evidence suggests that consumers tend to spend all their current disposable income immediately.is it irrational? Explain
- Empirical evidence suggests that many consumers tend to spend all of their current disposable income immediately. Is this irrational?Consider two savings accounts that pay the same interest rate. One account lets you take your money out on demand. The second requires that you give 30-day advance notification before withdrawals. Which account would you prefer? Why? Can you imagine a person who might make the opposite choice? What do these choices say about the theory of the consumption function?Empirical evidence suggest that many consumers tend to spend all of their current disposable income immediately. Is this irrational? Discuss
- Which of the following two effects of a decrease in the tax rate on saving would raise savings? a. the income effect and the substitution effect b. the income effect but not the substitution effect c. the substitution effect but not the income effect d. neither the substitution effect nor the income effectIf the supply of petroleum were reduced by petroleum firms due to rising inventories, we can expect what?“Diminishing MRS reflects the notion that people prefer balance in their consumption choices.” True or False. Explain your answer. (2 + 3 points)
- emperical evidence suggests that consumers tend to spend their current disposable income immediatelySuppose the government decides to borrow money. The equilibrium interest rate will _____ and the total amount borrowed will _____Explain the term random walk in consumption. Under what conditions will consumption follow such a behaviour?.