Exam 24: Aggregate Demand and the Powerful Consumer

The relationship between consumption and disposable income is very unreliable and unpredictable.

Why is it true that domestic product and national income must be equal?

In the circular flow model, which of the following is an injection?

Adding depreciation to net national product yields

The __________ shows a direct relationship between consumption spending and disposable income.

In the circular flow model, savings is considered a leakage because

The net export component of aggregate demand is defined as U.S.

Financial investments, such as mutual fund purchases, are included in the national income component.

The change in consumption divided by the change in disposable income is called the

In 1975, Congress passed a tax rebate to spur consumer spending.Consumers

Data from the World War II era showed that

When the price level falls, consumers may feel wealthier and the consumption function will shift upward.

Capital goods are counted the same as consumer goods in the national product accounts.

If disposable income increases by $400 billion and consumption increases by $300 billion, the MPC equals

Both President Bush and President Obama wanted tax cuts to stimulate consumer spending during the 2007-2009 recession.

Why does an increase in the price level tend to cause the consumption function to shift downward?

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

Table 8-1 -According to the data in Table 8-1, the value of GDP is

The largest income component in the national income accounts is

Which of the following would be removed from the U.S.aggregate demand measurement?