Explain how the following will affect the consumption and saving.In your answer refer to the diagrams provided as appropriate and identify the correct changein consumption and saving in the figures. (Start from point A in Figure 1 and point A’ inFigure 2).Figure 1 Consumption functionDuring the test, you will be asked this question with a different example.ExampleDue to a decrease in income tax, household incomes increase by $1000 on average.Figure 2 Loanable funds market

Explain how the following will affect the consumption and saving.In your answer refer to the diagrams provided as appropriate and identify the correct changein consumption and saving in the figures. (Start from point A in Figure 1 and point A’ inFigure 2).

How does the income effect impact the consumption of Giffen goods?An increase in income leads to less consumptionA decrease in income leads to more consumptionAn increase in income leads to more consumptionBoth a) and b)PREVIOUS

What does the consumption function describe? Question 7Select one:a.The relationship between consumption expenditures and disposable incomeb.The relationship between total tax and incomec.The relationship between investment expenditures and the rate of interestd.The relationship between quantity demanded and price

Explain how the following will affect• the investment decision,• the demand for loanable funds and• the interest rate in the loanable funds market.In your answer refer to the figure provided as appropriate and identify the correct change inthe investment and the interest rate. (Start from point A in Figure 3).Figure 3 Loanable funds marketDuring the test, you will be asked this question with a different example.ExampleThe depreciation rate in the economy increases.*********************************************************************************************************

A decrease in individual income taxes​ ________ disposable​ income, which​ ________ consumption spending. a. decreases; increases b. decreases; decreases c. increases; decreases d. increases; increases