Given the consumption function below C = + Y, if is 0.4, how can it be interpreted?

Select one:

a.Out of any additional income, Consumption increases by 60%

b.Out of any additional income, Consumption increases by 4%

c.Out of any additional income, Consumption increases by 0.4%

d.Out of any additional income, consumption increases by 40%

Which one of the following is NOT a possible relationship between income and spending

Select one:

a.None is a relationship

b.Spending is higher than income

c.Income is higher than spending

d.Income equals the level of spending

Which of the following statements are correct?

a.If the marginal propensity to consume increases, the equilibrium level of income will increase.

b.In an open economy with a government sector the sum of the marginal propensity to consume and the marginal propensity to save is always equalto 1.

c.If the tax rate decreases, the aggregate spending curve will shift parallel upwards.

Select one:

A.a and b

B.b and c

C.a and c

D.b