Exam 30: Basic Macroeconomic Relationships

If Matt's disposable income increases from $4,000 to $4,500 and his level of saving increases from $200 to $325, it may be concluded that his marginal propensity to

The MPC can be defined as the

An increase in spending of $25 billion increases real GDP from $600 billion to $700 billion.The marginal propensity to consume must be

The slope of the consumption schedule between two points on the schedule is

Which factor explains the variability of investment?

An increase in business taxes will tend to shift the investment-demand curve rightward.

(Last Word) Art Buchwald's article "Squaring the Economic Circle" is a humorous description of

The most important determinant of consumer spending is

The average propensity to save is equal to the percentage of total income that is saved.

A decline in the real interest rate will shift the investment demand curve to the right.

If the marginal propensity to save is 0.2 in an economy, a $20 billion rise in investment spending will increase

The average propensity to consume is defined as income divided by consumption.

Art Buchwald's article in the Last Word section of the chapter, "Squaring the Economic Circle," is a humorous description of

Assume the MPC is 2/3.If investment spending increases by $2 billion, the level of GDP will increase by

In a private closed economy, national income is $4.5 trillion and saving equals $6.4 billion.Based on these data, the marginal propensity to consume

The most important determinant of consumption and saving is the

The amount of consumption in an economy correlates

If the Hennige family's marginal propensity to consume is 0.70, then it will necessarily consume seven-tenths of its total income.

Which of the following factors does not help explain the instability of investment?

Investment is not affected by current profits; it is affected by expected future profits only.