It is risky to invest in a commodity because: <span>The commodity's price might drop significantly very quicklly
</span>Commodity products are circulated really quickly. This will affect the rarity of the product in the markets. If the rarity is high, the price will increase and vice versa. This exact condition makes the price for that commodity also fluctuated really quickly.
Answer:
The correct answer is C) Consumption function shifts up
Explanation:
The consumption function is C = a + b x Yd
where:
- C = Total consumption
- a = autonomous consumption
- b x Yd = induced consumption
Autonomous consumption is consumption that does not depend on income. Even if your income is zero, you still have to engage in this type of consumption to survive (for example, food).
When you graph a consumption function, the Y axis represents total consumption and the X axis represents income. Autonomous consumption is located somewhere along the Y axis, with the X being zero. If Autonomous consumption increases, the point in the Y axis will move up, but the point in the x axis will still be zero, hence, the function will shift up.
