Exam 10: B: Basic Macroeconomic Relationships

In comparison with the consumption schedule, the investment schedule is:

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

The business investment is not based on the expected returns.

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

The investment-demand curve will shift to the left as a result of:

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

Other things equal, if the real interest rate falls and business taxes rise:

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

Firms make planned changes to their inventories:

Refer to the above data.The marginal propensity to consume is:

A high rate of inflation is likely to cause a:

The above figure shows the saving schedules for economies 1, 2, 3, and 4.Which economy has the largest multiplier?

Suppose the consumption schedule is: C = 20 + .9Y, where C is consumption and Y is disposable income.Refer to the above data.At an $800 level of disposable income, the level of saving is:

If the MPS is 1, the multiplier will be 1.

The real interest rate is:

Which of the following relations is not correct?

The size of the simple multiplier is equal to the:

As disposable income increases, consumption:

Suppose the government finds it can increase equilibrium real GDP by $45 billion by increasing government purchases by $18 billion.On the basis of this information we can say that the:

The most important determinant of consumption and saving is the: