Exam 24: Aggregate Demand and the Powerful Consumer

Disposable income can be defined as national product

An increase in stock prices will be a(n)

A movement from one point to another point on the same consumption function could be caused due to

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

New residential housing is placed under consumer expenditures in aggregate demand.

What is aggregate demand? What are its major components?

If real disposable income is $300 billion and real consumer expenditures are $250 billion, it can be assumed that

Consumption functions would shift downward if

In 1963, government economists assumed that the MPC for the United States was approximately 0.90. If taxes were cut by $9 billion, then consumer expenditures would initially be expected to

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

A movement along the consumption function can be caused by a

The nation's disposable income increases by $400 billion and, as a result, consumer spending increases by $320 billion. Therefore, the MPC equals

Which factors will cause the consumption function to shift? Which factors do not cause the function to shift?

National income minus personal taxes net of transfer payments equals disposable income.

A decrease in the price level will most likely have what effect on the consumption function?

The difference between national income and disposable income is

The difference between disposable income and consumption spending is

Suppose your consumption function shifts downward. This can be caused by if the consumption function shifts downward, which of the following is the most likely cause?

Consumers most likely decide on their current consumption spending by looking at their short-run income prospects.

Consumer spending is an injection in the circular flow of income and spending.