Question: Explain how each of the following will affect the consumption and saving schedules (as they relate to GDP) or the investment schedule, other things equal:

Explain how each of the following will affect the consumption and saving schedules (as they relate to GDP) or the investment schedule, other things equal:
a. A large increase in the value of real estate, including private houses.
b. A decline in the real interest rate.
c. A sharp, sustained decline in stock prices.
d. An increase in the rate of population growth.
e. The development of a cheaper method of manufacturing computer chips.
f. A sizable increase in the retirement age for collecting Social Security benefits.
g. An increase in the Federal personal income tax.

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a If this simply means households have become more wealthy then consumption will increase at each income level The consumption schedule should shift u... View full answer

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