Exam 8: Aggregate Expenditures

If the marginal propensity to consume is 0.6, the marginal propensity to save is 0.4, and government spending increases by $2 billion at the same time taxes rise by $2 billion, equilibrium income will

(Multiple Choice)

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Question 121

If income is $35,000 and the average propensity to save is 0.46, what is consumption?

(Multiple Choice)

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Question 122

If income rises from $3,000 per month to $3,500 per month and consumption increases from $2,800 per month to $3,200 per month, what is the marginal propensity to consume?

(Multiple Choice)

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Question 123

The average propensity to save is calculated by dividing savings by income.

(True/False)

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Question 124

If disposable income is $250 and saving is $50, how much is the average propensity to consume?

(Multiple Choice)

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Question 125

According to the simple Keynesian model, which statement is NOT correct?

(Multiple Choice)

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Question 126

If the marginal propensity to consume is 0.8, by how much will total income increase after an initial $200 is spent?

(Multiple Choice)

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Question 127

The factors that shift the savings and consumption schedule include all of these EXCEPT

(Multiple Choice)

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Question 128

(Table) The following table shows data for an employee. The employee was hired at $500 per week and then got a raise to $550. Suppose the worker gets an additional $20 per week raise. How much of that extra $20 is saved and how much is spent? What is the marginal propensity to consume?

(Essay)

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Question 129

Which of these did classical economists believe would happen if the economy experienced a downturn?

(Multiple Choice)

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Question 130

(Table) When disposable income is $1,200, what is the value of the average propensity to save?

(Multiple Choice)

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Question 131

In the simple Keynesian model, if desired investment is greater than desired saving

(Multiple Choice)

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Question 132

The rate of return on investment is the main determinant of investment spending.

(True/False)

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Question 133

Tax cuts directed at younger people and people with lower incomes are designed to put money into the hands of those most likely to spend it, thus creating a positive ripple effect.

(True/False)

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Question 134

Taxes are added to total income to calculate disposable income.

(True/False)

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Question 135

Consumption expenditures play a minor role in the U.S. economy.

(True/False)

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Question 136

(Figure: Simple Keynesian Model) In the figure, suppose investment has increased from AE = C + I₀ to AE = C + I₁. The multiplier equals

(Multiple Choice)

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Question 137

Assume that the MPC is 0.8, full employment is considered to be at a GDP level of $500 billion, and the current GDP is $400 billion. The government is committed to a balanced budget. To achieve full employment, the government should ___ taxes by _ and increase government spending by ___.

(Multiple Choice)

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Question 138

In the simple Keynesian model, equilibrium occurs when there are no net pressures pushing the economy to move to a higher or lower level of income and output.

(True/False)

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Question 139

If the marginal propensity to save is 0.25 and income increases by $7,540, what is the increase in consumption?

(Multiple Choice)

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Question 140

Showing 121 - 140 of 276

If the marginal propensity to consume is 0.6, the marginal propensity to save is 0.4, and government spending increases by $2 billion at the same time taxes rise by $2 billion, equilibrium income will

If income is $35,000 and the average propensity to save is 0.46, what is consumption?

If income rises from $3,000 per month to $3,500 per month and consumption increases from $2,800 per month to $3,200 per month, what is the marginal propensity to consume?

The average propensity to save is calculated by dividing savings by income.

If disposable income is $250 and saving is $50, how much is the average propensity to consume?

According to the simple Keynesian model, which statement is NOT correct?

If the marginal propensity to consume is 0.8, by how much will total income increase after an initial $200 is spent?

The factors that shift the savings and consumption schedule include all of these EXCEPT

(Table) The following table shows data for an employee. The employee was hired at $500 per week and then got a raise to $550. Suppose the worker gets an additional $20 per week raise. How much of that extra $20 is saved and how much is spent? What is the marginal propensity to consume?

Which of these did classical economists believe would happen if the economy experienced a downturn?

(Table) When disposable income is $1,200, what is the value of the average propensity to save?

In the simple Keynesian model, if desired investment is greater than desired saving

The rate of return on investment is the main determinant of investment spending.

Tax cuts directed at younger people and people with lower incomes are designed to put money into the hands of those most likely to spend it, thus creating a positive ripple effect.

Taxes are added to total income to calculate disposable income.

Consumption expenditures play a minor role in the U.S. economy.

(Figure: Simple Keynesian Model) In the figure, suppose investment has increased from AE = C + I₀ to AE = C + I₁. The multiplier equals

Assume that the MPC is 0.8, full employment is considered to be at a GDP level of $500 billion, and the current GDP is $400 billion. The government is committed to a balanced budget. To achieve full employment, the government should ___ taxes by _ and increase government spending by ___.

In the simple Keynesian model, equilibrium occurs when there are no net pressures pushing the economy to move to a higher or lower level of income and output.

If the marginal propensity to save is 0.25 and income increases by $7,540, what is the increase in consumption?

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

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Exam 8: Aggregate Expenditures

If the marginal propensity to consume is 0.6, the marginal propensity to save is 0.4, and government spending increases by $2 billion at the same time taxes rise by $2 billion, equilibrium income will

If income is $35,000 and the average propensity to save is 0.46, what is consumption?

If income rises from $3,000 per month to $3,500 per month and consumption increases from $2,800 per month to $3,200 per month, what is the marginal propensity to consume?

The average propensity to save is calculated by dividing savings by income.

If disposable income is $250 and saving is $50, how much is the average propensity to consume?

According to the simple Keynesian model, which statement is NOT correct?

If the marginal propensity to consume is 0.8, by how much will total income increase after an initial $200 is spent?

The factors that shift the savings and consumption schedule include all of these EXCEPT

(Table) The following table shows data for an employee. The employee was hired at $500 per week and then got a raise to $550. Suppose the worker gets an additional $20 per week raise. How much of that extra $20 is saved and how much is spent? What is the marginal propensity to consume?

Which of these did classical economists believe would happen if the economy experienced a downturn?

(Table) When disposable income is $1,200, what is the value of the average propensity to save?

In the simple Keynesian model, if desired investment is greater than desired saving

The rate of return on investment is the main determinant of investment spending.

Tax cuts directed at younger people and people with lower incomes are designed to put money into the hands of those most likely to spend it, thus creating a positive ripple effect.

Taxes are added to total income to calculate disposable income.

Consumption expenditures play a minor role in the U.S. economy.

(Figure: Simple Keynesian Model) In the figure, suppose investment has increased from AE = C + I0 to AE = C + I1. The multiplier equals

Assume that the MPC is 0.8, full employment is considered to be at a GDP level of $500 billion, and the current GDP is $400 billion. The government is committed to a balanced budget. To achieve full employment, the government should _____ taxes by _____ and increase government spending by _____.

In the simple Keynesian model, equilibrium occurs when there are no net pressures pushing the economy to move to a higher or lower level of income and output.

If the marginal propensity to save is 0.25 and income increases by $7,540, what is the increase in consumption?

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

Filters

(Figure: Simple Keynesian Model) In the figure, suppose investment has increased from AE = C + I₀ to AE = C + I₁. The multiplier equals

Assume that the MPC is 0.8, full employment is considered to be at a GDP level of $500 billion, and the current GDP is $400 billion. The government is committed to a balanced budget. To achieve full employment, the government should ___ taxes by _ and increase government spending by ___.