question
According to Keynes, the primary determinant of consumption (and saving) is
a.) disposable income.
b.) Gross Domestic Product.
c.) prices.
d.) interest rates.
a.) disposable income.
b.) Gross Domestic Product.
c.) prices.
d.) interest rates.
answer
b.) Gross Domestic Product.
question
Assume Taxes are zero and the consumption function C = 0.95(Yd) + 500. Based on this information, autonomous consumption is ________ and the marginal propensity to consume is _________. If income increases by $100, then consumption increases by _________.
answer
$500; 0.95; $95
question
Assume taxes are zero and the consumption function is C = 0.75(Yd) + 200. If disposable income (Yd) is $500, then the average propensity to consume (APC) is _______ and the average propensity to save (APS) is ________.
answer
1.15; -0.15
question
Assume taxes are zero and the consumption function is C = 0.85(Yd) + $450. Based on this information, the saving function is S = _______(Yd) - $________.
answer
0.15; $450
question
Assume taxes are zero and the consumption function is C = 0.75(Yd) + $250. Based on this information, the break-even (short-run equilibrium) level of income is $__________.
answer
$1,000
question
Which of the following will shift the consumption function upward? A(n)
a.) increase in disposable income.
b.) decrease in interest rates.
c.) increase in the price level.
d.) decrease in the population.
a.) increase in disposable income.
b.) decrease in interest rates.
c.) increase in the price level.
d.) decrease in the population.
answer
b.) decrease in interest rates.
question
Assume taxes are zero and the consumption function is C = 0.80(Yd) + $300 and Investment is I = $200. Based on this information, the (short-run) equilibrium level of GDP (income) is $_________.
answer
$2,500
question
Consumption = $200 + 0.75(Yd)
Investment Spending = $500
Government Purchases = $250
Taxes = $100
Exports = $150
Imports = $225
Based on this information, the actual equilibrium real GDP is $_________.
Investment Spending = $500
Government Purchases = $250
Taxes = $100
Exports = $150
Imports = $225
Based on this information, the actual equilibrium real GDP is $_________.
answer
$3,200
question
If the marginal propensity to consume (MPC) is 0.90 and net exports decreases by $100 million, then real Gross Domestic Product (GDP) will ___________ by $_________ million.
answer
Decrease; $1,000
question
In the AD/AS model with an upward sloping SRAS curve, if autonomous net exports decrease by $50 billion and the marginal propensity to consume (MPC) is 0.80, then there is a(n) ___________ in ___________ by _____________ billion.
answer
Decrease; Equilibrium Real GDP; By Less Than $250
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
