Question 1

An MPC value of less than 1.0 indicates that as income increases,

Accepted Answer

A) consumption also increases, and by more than the increase in income. 
B) consumption also increases, and at the same rate as the increase in income. 
C) consumption will go in the opposite direction and decrease. 
D) consumption also increases, though not as much as income. 
A) consumption also increases, and by more than the increase in income. 
B) consumption also increases, and at the same rate as the increase in income. 
C) consumption will go in the opposite direction and decrease. 
D) consumption also increases, though not as much as income.

Question 2

The multiplier effect relates

Accepted Answer

A) changes in the price level to changes in real GDP. 
B) changes in the interest rate to changes in investment. 
C) changes in disposable income to changes in consumption. 
D) changes in spending to changes in real GDP. 
A) changes in the price level to changes in real GDP. 
B) changes in the interest rate to changes in investment. 
C) changes in disposable income to changes in consumption. 
D) changes in spending to changes in real GDP.

Question 3

Investment spending in the United States tends to be unstable because

Accepted Answer

A) profits are highly variable. 
B) the price level fluctuates rapidly. 
C) investment spending is affected by interest rates. 
D) capital wears out quickly and must be replaced often. 
A) profits are highly variable. 
B) the price level fluctuates rapidly. 
C) investment spending is affected by interest rates. 
D) capital wears out quickly and must be replaced often.

Exam 30: Basic Macroeconomic Relationships

An MPC value of less than 1.0 indicates that as income increases,

The multiplier effect relates

Investment spending in the United States tends to be unstable because

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

Filters