Exam 25: Aggregate Demand and the Powerful Consumer

If the Japanese economy is currently suffering from a recession we should expect U.S.exports to Japan to

In which of the following years was a tax cut ineffective in stimulating aggregate demand?

The marginal propensity to consume is calculated by dividing the change in consumer spending by the change in disposable income.

Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary.

Which of the following will most likely cause a shift in the consumption function?

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

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

The equation representing the final demand approach to calculating GDP is

Economists expect the relationship between consumption and disposable income to be

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

The book that is the basis for modern macroeconomic theory is

Investment goods are counted in GDP because they are

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

Imports are a leakage in the sense that

Most older persons regularly spend more than their current disposable income.How is this possible?

Assume that consumption in the United States is $9,000 billion in 2009.If the MPC is 0.8 and disposable income increases by $1,000 billion in 2010, then the level of consumption in 2010 will be

Figure 8-2 -In Figure 8-2, which of the following moves can be explained by a decrease in disposable income?

What is aggregate demand? What are its major components?

Goods produced that go into inventories are

The tax cuts of 2008 and 2009 were effective because consumers believed that they were temporary.