Exam 11: Consumption, Real GDP, and the Multiplier

-In the above table, the marginal propensity to save is

When real GDP is in equilibrium with no government and no international trade

If real Gross Domestic Product (GDP)is at an equilibrium level in a closed economy,

The planned investment function shows that

Compared to consumption spending, investment historically has tended to be

Saving equals

Expenditures by firms on new machines and buildings that are expected to yield a future stream of income is known as

-Refer to the above figure. The figure represents the consumption function for a consumer. Point C represents

How does an increase in the price level affect the position of the C + I + G + X curve and in turn the equilibrium level of real GDP?

Savings are an example of

In Keynesian analysis, if investment remains constant when income changes, the investment is called

-Use the above table. We can infer from the table that when real disposable income is $175

The marginal propensity to consume (MPC)is

At a level of real disposable income of $1,000, suppose consumption is $2,000. Given this information, we know with certainty that saving equals

Investment is

The difference between a stock and a flow is

Planned expenditures equal real disposable income

-Refer to the above figure. Dissaving occurs,

The larger the value of the marginal propensity to save (MPS)

Suppose the economy is at an equilibrium when C + I + G + X = $12 trillion. If the economy is currently at a real national income level of $14 trillion, then total planned real expenditures