Exam 25: Aggregate Demand and the Powerful Consumer

To get a complete measure of the total spending on U.S.-produced final goods and services, one must adjust aggregate demand by

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

A sudden decrease in consumers' wealth-resulting, for example, from a stock market crash-would initially cause a(n)

To economists, investment means buying stocks and bonds.

The difference between disposable income and consumption spending is

Goods produced that go into inventories are

The majority of payments made by the federal government are for

Inventories are goods that can be considered as "purchased" by

Melissa purchases shares in a government bond mutual fund.Is this included in the aggregate demand component "Investment"?

Taxes add to and transfers subtract from the flow of income and spending.

Government-produced goods are added to GDP at

If you fit a line through a scatter diagram of points that represent coordinates of consumer spending and disposable income, the slope of this line will equal the

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

Which of the following is a transfer payment?

The term "depreciation" in the national income accounts refers to

The consumption function shows an indirect relationship between consumer spending and disposable income.

On a graph with consumption on the vertical axis and disposable income on the horizontal axis, the slope of the line is

If consumers receive an increase in income of $1,000, their spending will increase by a smaller amount.

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

Figure 8-2 -In Figure 8-2, which of the following moves can be explained by a tax cut?