question
The sum of consumption and saving is called _____
answer
Answer
disposable income
disposable income
question
The part of the disposable income that is not consumed by households is:
answer
saved
question
The consumption function illustrates that:
answer
consumption increases as disposable income increases
question
Autonomous consumption is defined as:
answer
the level of consumption that does not depend on income.
question
Dissaving occurs when:
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consumption is greater than disposable income.
question
Identify the correct statement with respect to consumption and saving function.
answer
As disposable income rises, consumption and saving increase.
question
The amount of autonomous consumption in an economy is measured by the:
answer
the intercept of the consumption function when disposable income is zero.
question
Suppose two successive levels of disposable personal income increases from $16 to $21 billion and the change in consumption spending between these two levels of disposable personal income is $2 billion, then the MPC will equal _____.
answer
. 0.4
question
If a household's disposable income increases from $50,000 to $100,000 and its consumption increases from $40,000 to $80,000, the MPS must be ____
answer
.2
question
A change in consumption caused by a change in disposable income is shown by:
answer
a movement along the consumption function.
question
Which of the following will cause the investment function to shift upward?
answer
An increase in business profits
question
The net export function illustrates that:
answer
net exports are a negative function of domestic income.
question
Which of the following will cause the net export function to shift?
answer
A change in the exchange rate
question
Improvements in technology
answer
increase investment spending.
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