EBK PRINCIPLES OF MACROECONOMICS
12th Edition
ISBN: 9780134079592
Author: Oster
Publisher: YUZU
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Question
Chapter 1.A, Problem 2P
To determine
Relationship between income and consumption.
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For the relationship graphed below:
Household
Spending = C
($/month)
a
Question 7
Homework Unanswered
b
с
d
3,200
2,300
1,400
500
0
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
1,000
2,000 3,000 Total Income = Y($/month)
Spending Function
total income is the independent variable and household spending is the dependent variable.
total income is the dependent variable and household spending is the independent variable.
total income is unrelated to household spending.
total income is an exogenous variable, or shift factor.
7. Dependent & independent variables; positive & inverse relationships: Ypsilanti Market
Research conducted a survey to find out whether people who earn more money
purchase more expensive goods. The following table indicates the relationship between
income the survey subjects earned and the price of the car that they purchased.
Price
Income
(Thousands of
dollars per car)
(Thousands of
dollars per year)
0.
10
20
15
40
20
60
25
80
30
100
In the diagram below, draw the graph corresponding to the above table.
The accompanying table shows a portion of quarterly data for real personal consumption (Consumption in $) and real personal
disposable income (Income in $) for the years 2000-2019.
Date
Q1,2000
Q2, 2000
A
Q4,2019
Consumption
8520.71
8603.01
⠀
13411.94
Income
9338.68
9441.95
1
15100.13
pictureClick here for the Excel Data File
a. Construct a scatterplot of Consumption against Income. Given the scatterplot, which statement best describes the relationship
between Consumption and Income?
O Consumption and Income have a positive relationship.
O Consumption and Income have a negative relationship.
O Consumption and Income have no relationship.
O Consumption and Income have a U-shaped (nonlinear) relationship.
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