Other things being constant, what will be the effect of cach of the following on disposable income (or real GDP)? (a) An increase in the amount of liquid assets consumers are holding (b) A rapid upsurge in the rate of technological advance (c) A sharp increase in the real interest rate

a) an increase in the amount of liquid assets consumers are holding

In this case , it should increase the disposable income. As the assets consumers are holding is liquid and this is only adding in to the wealth of consumers , giving them more money in hand to spend.

It increases the consumer's spending as well and shifts the consumption level upwards to a higher equilibrium output level.

b) a rapid upsurge in the rate of technological advance

An advancement in technology would possibly make the consumers spend more on the advanced products. There would be more investment and consumer spending. These factors would lead to increase in the GDP which shift the consumption level upwards and increase in the real quantity hence increase in GDP.

c) A sharp increase in the real interest rates.

A sharp increase would deter consumers from spending as the products and services would become expensive because of the interest rate sharp rise and it will also limit Investment spendings and aggregate supply would shift leftwards.

These factors would shift consumer spending downwards hence leading to decrease in GDP.