Economics Final Exam

question

When a household's disposable income falls to zero, what do we expect will happen?

answer

Comsumption will fall to the level of autonomous consumption

question

Which of the following would NOT be considered a consumption good?

answer

Shears that cut metal on an auto production line

question

At the break-even point for the consumption function

answer

Saving is zero

question

The expression 1/MPS is defined as

answer

The multiplier

question

Suppose real disposable income increases by $1,000. Given this information, we know that

answer

Consumption will generally increase by less than $1,000

question

Suppose that MPC IS.75 and there is an increase in investment spending of $100,000. As a result, equilibrium real GDP would increase by

answer

400,000

question

The 45-degree line

answer

Shows various combinations where planned consumption equals real disposable income

question

Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is

answer

.75

question

Suppose that the MPS=.2. The value of the multiplier would be

answer

question

In the Keynesian model, planned investment is inversely related to

answer

The interest rate

question

The consumption function shows the relationship

answer

Between households' disposable income and their consumption spending

question

If the MPC is 0.8, then the MPS is

answer

0.2

question

Suppose that MPC is .50 and there is an increase in investment spending of $1,000. As a result, equilibrium real GDP would increase by

answer

2000

question

Which of the following represents the correct relationship between disposable income (DI), consumption (C), and saving (S)?

answer

DI=C+S

question

Which of the following is true?

answer

MPC+MPS=1

1 of 15

question

When a household's disposable income falls to zero, what do we expect will happen?

answer

Comsumption will fall to the level of autonomous consumption

question

Which of the following would NOT be considered a consumption good?

answer

Shears that cut metal on an auto production line

question

At the break-even point for the consumption function

answer

Saving is zero

question

The expression 1/MPS is defined as

answer

The multiplier

question

Suppose real disposable income increases by $1,000. Given this information, we know that

answer

Consumption will generally increase by less than $1,000

question

Suppose that MPC IS.75 and there is an increase in investment spending of $100,000. As a result, equilibrium real GDP would increase by

answer

400,000

question

The 45-degree line

answer

Shows various combinations where planned consumption equals real disposable income

question

Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is

answer

.75

question

Suppose that the MPS=.2. The value of the multiplier would be

answer

question

In the Keynesian model, planned investment is inversely related to

answer

The interest rate

question

The consumption function shows the relationship

answer

Between households' disposable income and their consumption spending

question

If the MPC is 0.8, then the MPS is

answer

0.2

question

Suppose that MPC is .50 and there is an increase in investment spending of $1,000. As a result, equilibrium real GDP would increase by

answer

2000

question

Which of the following represents the correct relationship between disposable income (DI), consumption (C), and saving (S)?

answer

DI=C+S

question

Which of the following is true?

answer

MPC+MPS=1

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Economics Final Exam

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