Eco Exam--Chapter 10

The most important determinant of consumer spending is:

The most important determinant of consumption and saving is the:

If Carol's disposable income increases from 1200 to 1700 and her level of saving increases from minus 100 to plus 100, her marginal propensity to:

With marginal propensity to save of .4, the marginal propensity to consume will be:

The MPC can be defined as the fraction of a:

The 45-degree line on a graph relating consumption and income shows:

The disposable income goes up, the:

The consumption schedule shows:

The consumption schedule directly relates:

A decline in disposable income:

The APC is calculated as:

The consumption schedule shows: (what type of relationship)

The APC can be defined as the fraction of a:

The consumption schedule is drawn on the assumption that as income increases, consumption will:

which of the following is correct?

The consumption schedule is such that:

The consumption and saving schedules reveal that the:

The size of the MPC is assumed to be:

As disposable income increases, consumption: A. and saving both increase. B. and saving both decrease. C. decreases and saving increases. D. increases and saving decreases.

The relationship between consumption and disposable income is such that:

If the MPC is .8 and disposable income is 200 then:

The MPC for an economy is:

In contrast to investment, consumption is:

Which one of the following will cause a movement down along an economy's consumption schedule?

At the point where the consumption schedule intersects the 45-degree line:

Tessa's break-even income is $10,000 and her MPC is 0.75. If her actual disposable income is $16,000, her level of:

If Trent's MPC is .80, this means that he will:

Suppose a family's consumption exceeds its disposable income. This means that its:

The equation C = 35 + .75Y, where C is consumption and Y is disposable income, shows that:

If the equation C = 20 + .6Y, where C is consumption and Y is disposable income, were graphed:

One can determine the amount of any level of total income that is consumed by:

Which of the following is correct? A. MPC + MPS = APC + APS. B. APC + MPS = APS + MPC. C. APC + MPC = APS + MPS. D. APC - APS = MPC - MPS.

Dissaving means:

Dissaving occurs where:

Which of the following relations is not correct? A. 1 - MPC = MPS. B. APS + APC = 1. C. MPS = MPC + 1. D. MPC + MPS = 1.

The saving schedule is drawn on the assumption that as income increases:

At the point where the consumption schedule intersects the 45-degree line: (s is..)

The saving schedule is such that as aggregate income increases by a certain amount, saving:

If the consumption schedule is linear, then the

Given the consumption schedule, it is possible to graph the relevant saving schedule by:

If the marginal propensity to consume is .9, then the marginal propensity to save must be:

The greater is the marginal propensity to consume, the:

If the saving schedule is a straight line, the:

Which one of the following will cause a movement up along an economy's saving schedule?

In the late 1990s, the U.S. stock market boomed, causing U.S. consumption to rise. Economists refer to this outcome as the:

The wealth effect is shown graphically as a:

An upward shift of the saving schedule suggests:

Which of the following will not tend to shift the consumption schedule upward? A currently small stock of durable goods in the possession of consumers. B. The expectation of a future decline in the consumer price index. C. A currently low level of household debt. D. The expectation of future shortages of essential consumer goods.

If the consumption schedule shifts upward and the shift was not caused by a tax change, the saving schedule:

Which of the following will not cause the consumption schedule to shift?

When consumption and saving are graphed relative to real GDP, an increase in personal taxes will shift:

If for some reason households become increasingly thrifty, we could show this by:

Assume the economy's consumption and saving schedules simultaneously shift downward. This must be the result of:

The investment demand curve portrays an inverse (negative) relationship between:

The investment demand slopes downward and to the right because lower real interest rates:

Other things equal, a decrease in the real interest rate will:

Suppose that a new machine tool having a useful life of only one year costs $80,000. Suppose, also, that the net additional revenue resulting from buying this tool is expected to be $96,000. The expected rate of return on this tool is:

The relationship between the real interest rate and investment is shown by the:

Given the expected rate of return on all possible investment opportunities in the economy:

A decline in the real interest rate will:

The immediate determinants of investment spending are the:

The investment demand curve suggests:

Investment spending in the United States tends to be unstable because:

In annual percentage terms, investment spending in the United States is:

If the real interest rate in the economy is i and the expected rate of return on additional investment is r, then other things equal:

A high rate of inflation is likely to cause a:

If the inflation rate is 10 percent and the real interest rate is 12 percent, the nominal interest rate is:

If the nominal interest rate is 18 percent and the real interest rate is 6 percent, the inflation rate is:

When we draw an investment demand curve, we hold constant all of the following except: A. the expected rate of return on the investment. B. business taxes. C. the interest rate. D. the present stock of capital goods.

Capital goods, because their purchases can be postponed like ______ consumer goods, tend to contribute to ________ in investment spending.

The multiplier effect means that:

The multiplier is:

The multiplier is useful in determining the:

The multiplier is defined as:

If 100 percent of any change in income is spent, the multiplier will be:

The multiplier can be calculated as:

The size of the multiplier is equal to the:

If the MPS is only half as large as the MPC, the multiplier is:

If the MPC is .70 and investment increases by $3 billion, the equilibrium GDP will:

The numerical value of the multiplier will be smaller the:

The practical significance of the multiplier is that it:

If the MPC is .6, the multiplier will be:

Assume the MPC is 2/3. If investment spending increases by $2 billion, the level of GDP will increase by:

The multiplier applies to:

The multiplier effect indicates that: