current consumption with expectation can be show as = C', C'(total wealth, YLt - T) Assuming...

 

 

 

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current consumption with expectation can be show as = C', C'(total wealth, YLt - T) Assuming that the nonhuman wealth is 0 and the spontaneous (autonomous) consumption is 0, compared with the consumption function of the simple Keynesian model, which of the following is correct when an unexpected increase in current disposable income? Ct = C(YLt - Tt) (A)In general, C, will increase more than C't (B) In general, Ct will increase less than C't (C) In general, C, will increase equal to C't (D)all of above are possible current consumption with expectation can be show as = C', C'(total wealth, YLt - T) Assuming that the nonhuman wealth is 0 and the spontaneous (autonomous) consumption is 0, compared with the consumption function of the simple Keynesian model, which of the following is correct when an unexpected increase in current disposable income? Ct = C(YLt - Tt) (A)In general, C, will increase more than C't (B) In general, Ct will increase less than C't (C) In general, C, will increase equal to C't (D)all of above are possible

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The detailed answer for the above question is provided below Based on the information you provided the image shows a consumption function The consumpt... View the full answer