Exam 8: Aggregate Demand and The Powerful Consumer

The Marginal Propensity to Consume (MPC)is defined as the change in

According to economists,how does an increase in the inflation rate affect the consumption function?

The relationship between consumer spending and disposable income is called the

Which of the following would be most likely to shift the consumption function downward?

If the MPC is .80,then a change in disposable income of $60 billion will lead to an initial change in consumption of

Define investment? The meaning of investment is different for economists.Explain.

Government transfer payments are income earned by individuals who work for the federal government.

Why is it true that domestic product and national income must be equal?

The MPC can be used to predict the effect of a tax increase.

National income and domestic product must be equal.

If the stock market falls by 25 percent next year and remains down,what is most likely to happen to the consumption function?

A movement upward along the consumption function can be caused only by a(n)

If the Japanese economy is currently suffering from a recession we should expect U.S.exports to Japan to

Figure 8-2 -In Figure 8-2,which of the following moves can be explained by a decrease in the prices of stock on the NASDAQ?

Figure 8-1 -Given the scatter diagram in Figure 8-1,what is the MPC (your best estimate)?

If Kobe,an NBA star athlete,earns $10 million per year but has no money in the bank,he has a

Figure 8-1 -Based on the scatter diagram in Figure 8-1,if real disposable income is $800 billion,the consumption spending would be approximately

Consumers most likely decide on their current consumption spending by looking at their short-run income prospects.