Macroeconomics Ch. 10

A decline in real interest will....

An increase in household wealth that creates a wealth effect would shift the:

The MPC can be defined as that fraction of a:

A firm invests in a new machine that costs $5,000 a year but which is expected to produce an increase in total revenue of $5,200 a year. The current real rate of interest is 7 percent. The firm should:

A high rate of inflation is likely to cause a

The most important determinant of consumption and saving is the

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

In contrast to investment, consumption is:

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

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

In an economy, for every $1600 decrease in income, spending falls by $1200. It can be concluded that the:

The consumption schedule shows:

If the real interest rate in the economy is i and the expected rate of return from additional investment is r, then more investment will be forthcoming when:

1 - MPC = MPS. True

Personal saving is equal to:

The multiplier effect indicates that:

An MPC value of less than 1.0 indicates that as income increases:

A change in interest rates would shift the consumption schedule and the saving schedule ______; a change in taxes would shift these two schedules ______.

Generally speaking, the greater the MPS, the:

A rightward shift of the investment demand curve might be caused by:

Dissaving means

Assume that MPS is 0.4. If spending increases by $8 billion, then real GDP will increase by: