Exam 10: B: Basic Macroeconomic Relationships

The multiplier is equal to the reciprocal of the MPC.

A $1 billion increase in investment will cause a:

Suppose the consumption schedule is: C = 20 + .9Y, where C is consumption and Y is disposable income.Refer to the above data.The MPC is:

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

If the MPC is .70 and gross investment increases by $3 billion, the equilibrium GDP will:

Dissaving means:

The consumption schedule shows:

If the marginal propensity to consume is 0.9 in a private closed economy, a $20 billion decline in investment spending will decrease:

The above schedule indicates that if the real interest rate is 8 percent, then:

Which of the following equations correctly represents the data below?

A decline in the real interest rate will:

Which of the following is likely to happen as disposable income increases?

The APC can be defined as the fraction of a:

The increase in income which results from an increase in investment spending would be greater the:

The initial costs of capital goods, and the estimated costs of operating and maintaining those goods, affect the expected rate of return on investment.

The simple multiplier is defined as:

The simple multiplier is:

If a $50 billion decrease in investment spending causes income to decline by $50 billion in the first round of the multiplier process and by $25 in the second round, the multiplier in the economy is:

Holly's break-even level of income is $10,000 and her MPC is 0.75.If her actual disposable income is $16,000, her level of:

The simple multiplier applies: