Exam 10: Basic Macroeconomic Relationships

Refer to the given consumption schedules. DI signifies disposable income and C represents consumption expenditures. All figures are in billions of dollars. Suppose that consumption decreased By $2 billion at each level of DI in each of the three countries. We can conclude that the

If for some reason households become increasingly thrifty, we could show this by

Refer to the diagram. At disposable income level D, consumption is equal to

Refer to the given consumption schedules. DI signifies disposable income and C represents consumption expenditures. All figures are in billions of dollars. The marginal propensity to consume

Assume the economy's consumption and saving schedules simultaneously shift downward. This must be the result of

If the MPC is 0.70 and investment increases by $3 billion, the equilibrium GDP will

The consumption and saving schedules reveal that the

The MPC for an economy is

As disposable income decreases, consumption

Assume that for the entire business sector of a private closed economy, there are $0 worth of investment projects that will yield an expected rate of return of 25 percent or more. But there are $15 Worth of investments that will yield an expected rate of return of 20-25 percent, another $15 with an Expected rate of return of 15-20 percent, and an additional $15 of investment projects in each Successive rate of return range down to and including the 0-5 percent range. If the real interest rate is 5 percent, what amount of investment will be undertaken?

When a consumption schedule is plotted as a straight line, the slope of the consumption line is

If the slope of a linear consumption schedule increases in a private closed economy, then it can be concluded that the

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

Refer to the given graph. A shift of the consumption schedule from C2 to C1 might be caused by a(n)

A decline in the real interest rate will

Other things equal, a decrease in the real interest rate will

Other things equal, a 10 percent decrease in corporate income taxes will

If the consumption schedule is linear, then the

Refer to the diagram. Assume that for the entire business sector of a private closed economy there is $0 worth of investment projects that will yield an expected rate of return of 25 percent or more. But There are $15 worth of investments that will yield an expected rate of return of 20-25 percent; another $15 with an expected rate of return of 15-20 percent; and an additional $15 of investment projects in Each successive rate of return range down to and including the 0-5 percent range. Which of the lines On the diagram represents these data?

The consumption schedule is such that