Question: Explain the difference between autonomous and induced expenditures. Give examples of each. 2. Explain why the marginal propensity to consume out of a temporary tax

Explain the difference between autonomous and induced expenditures. Give examples of each.

2. Explain why the marginal propensity to consume out of a temporary tax rebate would be lower than that for a permanent rebate.

3. The consumption function we studied in the chapter predicted that consumption would sometimes exceed disposable personal income. How could this be?

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4. Using the same examples you gave in question 3, try to identify circular sequences, i.e. A affects B, but B also affects A.

6. Give three examples that nothing (doing nothing) can function as a cause.

2. To store it and