Question: for each of the following identify and state the determinant...
For each of the following, identify and state the determinant of consumption that's most relevant. Explain the change in consumption that results from a change in this determinant. Illustrate the change using a consumption function curve and an AD (two diagrams side by side).
a. Consumer households are very optimistic as the job market is very robust.
b. Consumer households' wealth increases as the value of residential housing has been appreciated in the last few years.