Macroeconomic ch.9

question

The consumption function relates consumption spending to

answer

disposable income

question

The table given below shows the disposable income and consumption of a household. In the table below, the level of saving at a disposable income of $1,200 is:

Disposable income. Consumption
1,000. 800
1,100. 880
1,200. 960
1,300. 1,040
1,400. 1,120

answer

$240

question

If a household's income falls from $20,000 to $17,000 and its consumption spending falls from $18,000 to $15,000 then it is

answer

Marginal propensity to save is zero

question

A technological change that positively affects business expectations will:

answer

Cause a rightward shift of the investment demand curve

question

Which of the following will NOT shift the consumption function?

answer

A change in the household disposable income

question

The difference Between consumption spending and disposable income

answer

Equals savings

question

The consumption function assumes that:

answer

Factors other than disposable income affects consumption, but those are held constant along the consumption function.

question

An increase in the market interest rate, other things equal, will

answer

Reduce the amount invested because the opportunity costs of investing will be higher

question

If a household's income rises from $46,000 to $46,700 and its consumption spending rises from $35,800 to $36,400 then its:

answer

Marginal propensity to consume is 0.86

question

Which of the following best describes aggregate expenditure?

answer

C+I+G+(X-M)

question

If incomes in the United States increases, others things equal, then U.S.

answer

Imports increase and exports remain constant

question

If the marginal propensity to consume is equal to 0.70 and income rises by $20 billion in an economy, then consumption spending will increase by:

answer

$14 billion

question

_______ is the reward savers earn for deferring consumption.

answer

Interest

question

An increase in net wealth will:

answer

Increase consumption and decrease saving at each level of income

question

Government outlays equal:

answer

The sum of government purchases and transfer payments

question

A decrease in the price level will

answer

Shift the consumption function upward

question

Historically, consumption spending in the United States has

answer

Remained appropriately constant as a percentage of income

question

Net taxes are:

answer

Taxes minus transfer payments

question

A decrease in disposable income will:

answer

Cause a downward movement along the consumption function

question

If the marginal propensity to consume, MPC, is less than 1 and a household's disposable income increases by $2,000 the household's consumption will

answer

Increase by less than $2,000

question

The fraction of an increase in income that is saved is referred to as the

answer

Marginal propensity to save

question

A higher interest rate will:

answer

Shift the consumption function downward

question

The fraction of a change in disposable income that is consumed is called

answer

The marginal propensity to consume

question

If the spending multiplier is greater than 1.0, a $200 billion increase in autonomous investment will cause

answer

Equilibrium real GDP demanded to increase by more than $200 billion

question

The marginal propensity to consume

answer

Is the change in consumption relative to a change in disposable income

1 of 25

question

The consumption function relates consumption spending to

answer

disposable income

question

answer

$240

question

If a household's income falls from $20,000 to $17,000 and its consumption spending falls from $18,000 to $15,000 then it is

answer

Marginal propensity to save is zero

question

A technological change that positively affects business expectations will:

answer

Cause a rightward shift of the investment demand curve

question

Which of the following will NOT shift the consumption function?

answer

A change in the household disposable income

question

The difference Between consumption spending and disposable income

answer

Equals savings

question

The consumption function assumes that:

answer

Factors other than disposable income affects consumption, but those are held constant along the consumption function.

question

An increase in the market interest rate, other things equal, will

answer

Reduce the amount invested because the opportunity costs of investing will be higher

question

If a household's income rises from $46,000 to $46,700 and its consumption spending rises from $35,800 to $36,400 then its:

answer

Marginal propensity to consume is 0.86

question

Which of the following best describes aggregate expenditure?

answer

C+I+G+(X-M)

question

If incomes in the United States increases, others things equal, then U.S.

answer

Imports increase and exports remain constant

question

If the marginal propensity to consume is equal to 0.70 and income rises by $20 billion in an economy, then consumption spending will increase by:

answer

$14 billion

question

_______ is the reward savers earn for deferring consumption.

answer

Interest

question

An increase in net wealth will:

answer

Increase consumption and decrease saving at each level of income

question

Government outlays equal:

answer

The sum of government purchases and transfer payments

question

A decrease in the price level will

answer

Shift the consumption function upward

question

Historically, consumption spending in the United States has

answer

Remained appropriately constant as a percentage of income

question

Net taxes are:

answer

Taxes minus transfer payments

question

A decrease in disposable income will:

answer

Cause a downward movement along the consumption function

question

If the marginal propensity to consume, MPC, is less than 1 and a household's disposable income increases by $2,000 the household's consumption will

answer

Increase by less than $2,000

question

The fraction of an increase in income that is saved is referred to as the

answer

Marginal propensity to save

question

A higher interest rate will:

answer

Shift the consumption function downward

question

The fraction of a change in disposable income that is consumed is called

answer

The marginal propensity to consume

question

If the spending multiplier is greater than 1.0, a $200 billion increase in autonomous investment will cause

answer

Equilibrium real GDP demanded to increase by more than $200 billion

question

The marginal propensity to consume

answer

Is the change in consumption relative to a change in disposable income

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Macroeconomic ch.9

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