Chapter 10

Question 1

Consumption and saving

Answer 1

Primarily determined by Disposable income

Question 2

Non-income determinants

Answer 2

wealth, borrowing, expectations, and real interest rates

Question 3

instability of Investment

Answer 3

variability of expectations, durability, irregularity of innovation, variability of profit

Question 4

Shift of Investment demand

Answer 4

changes in expected rate of return (maintenance/operating cost, business taxes, technological change, stock, planned inventory changed, expectations)