Short term consumption What is the difference between the long term consumption function?

The characteristic tease disadvantage of the long-term consumption function is ().

a.The marginal propensity to consume is less than the average propensity to consume.

b.The marginal propensity to consume is greater than the average propensity of the mountain people.

c.The marginal propensity to consume is equal to the average propensity to consume.

d.The marginal propensity to consume is equal to the average propensity to save.

Positive and Positive Answer: c

Short-term means that the producer has not had time to adjust the quantity of all factors of production, and the quantity of at least one factor of production is fixed and unchanged.

In the short run, factors of production can be divided into constant inputs and variable inputs: the part of factor inputs that producers cannot adjust quantitatively in the short term is constant factor inputs. For example, machinery and equipment, plants, etc.

The part of factor input that producers can make quantitative adjustments in the short term is the variable factor input. For example, labor, raw materials, fuel, etc.

Long-term refers to the time period in which the producer can adjust the quantity of all factors of production. In the long run, producers can adjust all factor inputs.

In the long run, enterprises can adjust the amount of input of all factors of production at any time as needed, and all inputs are variable.

Hello, short-term.

BAI consumption.

The common du of the function is: c = y

where c is the current consumption dao, which is the spontaneous consumption of domestic expenses, that is, the basic living consumption that must be had, is the marginal consumption tendency, y is the disposable income, and y represents the induced consumption), its basic meaning is that consumption is the sum of spontaneous consumption and inducing consumption, and the consumer's consumption mainly depends on disposable income. i.e. Keynesian theory of absolute income.

The formula of the long-term consumption function is: c = y, and the constant represents the fixed ratio of consumption to income), which shows that in the long-term consumption function, consumption is a fixed ratio of income, and the average propensity to consume is not decreasing, but quite stable.

The Kuznets Contradiction, which rejects the fourth proposition of Keynes' absolute income hypothesis: that the average propensity to consume declines as income rises.

The difference between the long-term consumption function and the short-term consumption function is that the short-term consumption curve does not pass through the origin, whereas the long-term consumption curve passes through the origin, i.e., in the long run, there is no consumption without income. And the long-term consumption curve is steeper than the short-term consumption curve.

Hope it helps!

The model copy is different, in Keynes's model, there is no short-term BAI and long-term DU, only the relative income theory has this.

It was proposed by Dusenberg Dao, who argued that consumption does not depend on the current absolute level of income, but on the relative level of income, that is, the level of income relative to other people and the highest level of income relative to oneself in history.

1) During periods of steady income growth, the savings rate and average propensity to consume do not depend on income levels.

2) In the long run, the average propensity to consume and the propensity to save is stable.

3) In the short run, the savings rate and marginal propensity to consume depend on the ratio of current income to peak income, so that short-term consumption will fluctuate, but due to the effect of habitual effect, income reduction has little effect on consumption reduction, while income increase has a greater effect on consumption increase.

4) Combining long-term and short-term effects, the independent variable that causes changes in the savings rate or average propensity to consume is the ratio of current income to peak income.

This model has a classic jinglun effect. You can check it out.

Answer] :(1) The theory of absolute income consumption was proposed by Keynes. Keynes believed that consumption depends on the level of income in the current period.

There is a basic psychological law between income and consumption: as income increases, consumption will also increase, but the increase in consumption will not be unprecedented, and the increase in income will be more. (2) The theory of relative income consumption was put forward by the American economist Dusenberry in the "Consumption Behavior Theory of Income and Savings".

On the basis of Keynes's erroneous assumptions, Dusenberry proposes that consumption does not depend on the current absolute level of income, but on the relative level of income, that is, the level of income relative to other agitators and the highest level of income relative to his own history. Based on the relative income assumption, Dusenberry argues that consumption is habitual, and consumption in a given period is affected not only by current income, but also by the highest income and maximum consumption achieved in the past.

Consumption is irreversible, that is, the "ratchet effect", that is, it is easy for the thrifty to be luxurious, and it is difficult for the extravagant to be thrifty; People's consumption will affect each other, and there is a tendency to compare, that is, the "demonstration effect", people's consumption does not depend on their absolute income level, but on their relative income level compared with others. (3) Comparing the two, it can be found that there is no difference between short-term and long-term consumption in the absolute income consumption theory, while the relative consumption theory believes that the short-term consumption function has a curve with a positive intercept, and there is a ratchet effect and a demonstration effect, while the long-term consumption function is a straight line from the origin.

Answer]: A The relationship between the consumption function and the savings function is: the consumption function and the savings function are complementary to each other, and the sum of the two is always equal to income.

Answer]: B knowledge points] The relationship between the consumption function and the savings function;

The relationship between the consumption function and the savings function is that the consumption function (APC) and the savings function (APS) complement each other, and the sum of consumption and savings is always equal to income.

The consumption function refers to the dependence between residents' consumption and consumption and the variables that determine consumption. There are many variables that determine consumption, but the most influential and decisive is the level of income. The consumption function focuses on the relationship between consumption and income, and consumption changes in the same direction with the change of income, all other things being equal.

Keynes believed that as income increases, consumption will also increase, but the increase in consumption is not as fast as the increase in income, that is, the marginal propensity to consume is decreasing, which is called the law of diminishing marginal propensity to consume. Many economists have revised, supplemented and developed this short-term analysis of Keynes's consumption function, which has promoted the development of the theory of consumption function, which is embodied in the development of Dusenberry's J s.

Duesenberry), Modigliani (FModigliani) and Friedman (MFriedman) proposed the consumption function of permanent income and other factors such as the high interest rate of silver, the level of ** and the distribution of income that affect consumption.

Generally speaking, when a country or a family has a high income, it consumes more, and when its income is low, it consumes less. The above is the consumption function, which can be expressed by the formula, c=c(y).

c is consumption, and the consumption of the whole nation is equal to the function of consumption, that is, the function of income c(y), and this function is called the consumption function.

The savings function refers to the dependence between savings and various factors that determine the size of savings, and there are many factors that affect savings. However, income is the most important factor, so the savings function mainly reflects the dependence between income and savings, generally speaking, under the same conditions, savings change in the same direction with the change of income, that is, income increases, savings increase, income decreases, and savings decrease.

The relationship between the consumption function and the savings function:

Clause. 1. The sum of the consumption function and the savings function is equal to the total income.

Clause. 2. The sum of the propensity to consume and the average propensity to save is always equal to 1.

Clause. 3. The sum of the marginal propensity to consume and the marginal propensity to save is always equal to 1.

The consumption function is like the number 1

Then the savings function is 0. So you'll have to start with 0 first.

On the other hand, a comparison is like rounding. From 1 to 100. The numbers 4 and 5 are always connected.

If you don't understand it anymore, go to the online library to read a ** of this article written by a professor at Zhejiang University.