Exam 13: Consumption and the Aggregate Expenditures Model

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G =Government Purchases. Consider a simple aggregate expenditures model, where AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. All other things unchanged, an increase in the price level,

(Multiple Choice)

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Question 141

Use the following to answer questions . Exhibit: Consumption and Disposable Personal Income -(Exhibit: Consumption and Disposable Personal Income) The marginal propensity to consume is

(Multiple Choice)

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Question 142

Suppose the slope of the aggregate expenditures curve is 0.75. An increase in autonomous investment expenditure of $6 billion would produce an ultimate increase in equilibrium real GDP of

(Multiple Choice)

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Question 143

Suppose that your annual income has averaged $40,000 for the past 10 years and that you expect it will average $40,000 over the next 10 years. If your income this year increases to $50,000 but your consumption expenditures don't change, then you are most likely acting according to the

(Multiple Choice)

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Question 144

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Suppose AE = C + I_P, and I_P is autonomous. What is the value of autonomous AE?

(Multiple Choice)

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Question 145

Which of the following is true? I. 1 − MPS = MPC where MPS = marginal propensity to save and MPC = marginal propensity to consume. II. personal saving + consumption = gross income III. ∆disposable income = ∆saving + ∆consumption where ∆ = change in

(Multiple Choice)

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Question 146

The bulk of aggregate demand in the United States consists of

(Multiple Choice)

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Question 147

The multiplier effect indicates that

(Multiple Choice)

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Question 148

Aggregate expenditures that do not vary with real GDP are called autonomous aggregate expenditures.

(True/False)

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Question 149

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Suppose AE = C + I_P. I_P is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If real GDP = $5,000 billion, what is the amount of aggregate expenditures?

(Multiple Choice)

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Question 150

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 2 -(Exhibit: Aggregate Expenditures and Real GDP 2) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Consider a simple economy where AE = C + I_P, I_P is autonomous and the consumption function is given by C = $1,000 billion + 0.75Y. What is the value of planned investment when real GDP is $6,000 billion?

(Multiple Choice)

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Question 151

Use the following to answer questions . Exhibit: Consumption and Real GDP -(Exhibit: Consumption and Real GDP) The marginal propensity to consume equals

(Multiple Choice)

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Question 152

The income households receive less the personal income taxes they pay is

(Multiple Choice)

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Question 153

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. If the consumption function is C = $500 + 0.8Y, planned investment = $200, government purchases = $300, Net exports = $100, and real GDP = $1,000, what is the amount of induced expenditures?

(Multiple Choice)

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Question 154

Use the following to answer questions . Exhibit: Consumption and Real GDP -(Exhibit: Consumption and Real GDP) An equation for the consumption function is

(Multiple Choice)

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Question 155

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, if the slope of the aggregate expenditures curve decreases, the multiplier

(Multiple Choice)

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Question 156

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Suppose AE = C + I_P. I_P is autonomous and the consumption function is C = $1,000 billion + 0.5Y. If Y= $6,000 billion, what is the value of consumption and planned investment?

(Multiple Choice)

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Question 157

Consumption spending in any one period that is determined by income in that period is explained by the

(Multiple Choice)

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Question 158

The consumption function expresses the

(Multiple Choice)

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Question 159

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Suppose AE = C + I_P, and I_P is autonomous. If potential real GDP is $7,000 billion, what must happen to planned investment for the economy to reach its potential real GDP?

(Multiple Choice)

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Question 160

Showing 141 - 160 of 219

Use the following to answer questions . Exhibit: Consumption and Disposable Personal Income -(Exhibit: Consumption and Disposable Personal Income) The marginal propensity to consume is

Suppose the slope of the aggregate expenditures curve is 0.75. An increase in autonomous investment expenditure of $6 billion would produce an ultimate increase in equilibrium real GDP of

Suppose that your annual income has averaged $40,000 for the past 10 years and that you expect it will average $40,000 over the next 10 years. If your income this year increases to $50,000 but your consumption expenditures don't change, then you are most likely acting according to the

Which of the following is true? I. 1 − MPS = MPC where MPS = marginal propensity to save and MPC = marginal propensity to consume. II. personal saving + consumption = gross income III. ∆disposable income = ∆saving + ∆consumption where ∆ = change in

The bulk of aggregate demand in the United States consists of

The multiplier effect indicates that

Aggregate expenditures that do not vary with real GDP are called autonomous aggregate expenditures.

Use the following to answer questions . Exhibit: Consumption and Real GDP -(Exhibit: Consumption and Real GDP) The marginal propensity to consume equals

The income households receive less the personal income taxes they pay is

Use the following to answer questions . Exhibit: Consumption and Real GDP -(Exhibit: Consumption and Real GDP) An equation for the consumption function is

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, if the slope of the aggregate expenditures curve decreases, the multiplier

Consumption spending in any one period that is determined by income in that period is explained by the

The consumption function expresses the

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