8. Suppose that an increase in consumer condence raises consumers’ expectations of future income and thus the amount they want to consume today. This…

These questions are from the textbook and the figure and table go with question 4, thank you.

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8. Suppose that an increase in consumer confidenceraises consumers’ expectations of future incomeand thus the amount they want to consume today.This might be interpreted as an upward shift in theconsumption fiinction. How does this shift affectinvestment and the interest rate?

 
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