Exam 24: Aggregate Demand and the Powerful Consumer

In the circular flow model, which of the following is considered a leakage?

Changes to the price level affect consumers' purchasing power; therefore, it will most likely impact their

In Macronesia, the MPC is approximately 0.80. If disposable income changes from 1,000 billion pukas to 1,500 billion pukas, then consumption will change by a(n)

If the MPC increases in value, what will happen to the slope of the consumption function?

Figure 8-2 In Figure 8-2, which of the following moves can be explained by a decrease in the prices of stock on the NASDAQ?

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

A major employer in a small town announces upcoming major layoffs of employees. What should we expect to happen to the consumption functions of the affected employees?

If consumers' expectations about future income are very optimistic, then we should expect

According to the relationship represented by the consumption function, governments can indirectly decrease consumption spending by

The marginal propensity to consume is

Plant and equipment that is "used up" in producing current output is

Aggregate demand is the sum of

Which of the following transactions is excluded from GDP?

One difficulty of computing the value of GDP is that there are no market prices for

Government spending and income taxes can affect the level of

Government spending is an injection in the sense that it

In the national income accounts, new investment goods are considered

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

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

The largest component of aggregate demand is