Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C1.Which of the following will cause an upward shift to curve C2?

A) a decrease in wealth B) an increase in price level C) an increase in interest rates D) an increase in consumer confidence A) a decrease in wealth B) an increase in price level C) an increase in interest rates D) an increase in consumer confidence

Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C1.Which of the following will cause a downward shift to curve C1?

A) a stock market crash that decreases household wealth B) a decrease in price level C) an increase in withholding tax rate D) rising optimism about economic conditions A) a stock market crash that decreases household wealth B) a decrease in price level C) an increase in withholding tax rate D) rising optimism about economic conditions

Exam 28: Consumption and the Aggregate Expenditures Model

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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 101

According to the real wealth effect, if you are living in a period of rising price levels, the cost of the goods and services you buy and your real income _____.

(Multiple Choice)

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Question 102

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, suppose when autonomous aggregate expenditures rise by $1,000 billion, equilibrium real GDP increases by $2,500 billion.Which of the following statements is true?

(Multiple Choice)

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Question 103

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, a decrease in the price level

(Multiple Choice)

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Question 104

Personal saving is real GDP not spent on consumption.

(True/False)

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Question 105

Personal saving equals

(Multiple Choice)

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Question 106

The amount of consumption that takes place when real GDP equals zero is called induced consumption.

(True/False)

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Question 107

Figure 13-6 -Refer to Figure 13-6.Suppose the government purchases economy rise by $100.What is the new equilibrium level of real GDP?

(Multiple Choice)

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Question 108

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.If the MPS is 0.4, then the multiplier is

(Multiple Choice)

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Question 109

If consumption increases by $75 billion when disposable personal income increases by $100, the marginal propensity to consume is 0.75.

(True/False)

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Question 110

Figure 13-3 -Refer to Figure 13-3.Which of the following statements is false?

(Multiple Choice)

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Question 111

Figure 13-5 -Refer to Figure 13-5.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Consider a simple economy where AE = C + I_P, and I_P is autonomous.What is the value of AE when Y = $12,000 billion?

(Multiple Choice)

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Question 112

The sum of planned levels of consumption, investment, government purchases, and net exports, at a given price level, is called

(Multiple Choice)

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Question 113

Figure 13-4 -Refer to Figure 13-4.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Suppose AE = C + I_P, and I_P is autonomous.At a real GDP of $7,000 billion

(Multiple Choice)

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Question 114

Figure 13-4 -Refer to Figure 13-4.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Suppose AE = C + I_P, and I_P is autonomous.At a real GDP of $5,000 billion,

(Multiple Choice)

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Question 115

Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C₁.Which of the following will cause an upward shift to curve C₂?

(Multiple Choice)

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Question 116

Disposable personal income is the total income households spend on consumption.

(True/False)

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Question 117

Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C₁.Which of the following will cause a downward shift to curve C₁?

(Multiple Choice)

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Question 118

Figure 13-2 -Refer to Figure 13-2.The marginal propensity to consume equals

(Multiple Choice)

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Question 119

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 120

Showing 101 - 120 of 199

Exam 28: Consumption and the Aggregate Expenditures Model

According to the real wealth effect, if you are living in a period of rising price levels, the cost of the goods and services you buy ______ and your real income ___________.

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, suppose when autonomous aggregate expenditures rise by $1,000 billion, equilibrium real GDP increases by $2,500 billion.Which of the following statements is true?

Personal saving is real GDP not spent on consumption.

Personal saving equals

The amount of consumption that takes place when real GDP equals zero is called induced consumption.

Figure 13-6 -Refer to Figure 13-6.Suppose the government purchases economy rise by $100.What is the new equilibrium level of real GDP?

Let AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment, G =Government Purchases.Consider a simple aggregate expenditures model, where AE = C + IP + G and all components of aggregate expenditures except consumption are autonomous.If the MPS is 0.4, then the multiplier is

If consumption increases by $75 billion when disposable personal income increases by $100, the marginal propensity to consume is 0.75.

Figure 13-3 -Refer to Figure 13-3.Which of the following statements is false?

Figure 13-5 -Refer to Figure 13-5.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment.Consider a simple economy where AE = C + IP, and IP is autonomous.What is the value of AE when Y = $12,000 billion?

The sum of planned levels of consumption, investment, government purchases, and net exports, at a given price level, is called

Figure 13-4 -Refer to Figure 13-4.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment.Suppose AE = C + IP, and IP is autonomous.At a real GDP of $7,000 billion

Figure 13-4 -Refer to Figure 13-4.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment.Suppose AE = C + IP, and IP is autonomous.At a real GDP of $5,000 billion,

Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C1.Which of the following will cause an upward shift to curve C2?

Disposable personal income is the total income households spend on consumption.

Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C1.Which of the following will cause a downward shift to curve C1?

Figure 13-2 -Refer to Figure 13-2.The marginal propensity to consume equals

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

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According to the real wealth effect, if you are living in a period of rising price levels, the cost of the goods and services you buy and your real income _____.

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.If the MPS is 0.4, then the multiplier is

Figure 13-5 -Refer to Figure 13-5.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Consider a simple economy where AE = C + I_P, and I_P is autonomous.What is the value of AE when Y = $12,000 billion?

Figure 13-4 -Refer to Figure 13-4.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Suppose AE = C + I_P, and I_P is autonomous.At a real GDP of $7,000 billion

Figure 13-4 -Refer to Figure 13-4.Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Suppose AE = C + I_P, and I_P is autonomous.At a real GDP of $5,000 billion,

Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C₁.Which of the following will cause an upward shift to curve C₂?

Figure 13-3 -Refer to Figure 13-3.Suppose the consumption function is given by curve C₁.Which of the following will cause a downward shift to curve C₁?