Exam 11: Consumption, Real GDP, and the Multiplier

With reference to the consumption function, the 45-degree line represents

Suppose equilibrium for an economy occurs when C + I + G + X = $14 trillion. If the real Gross Domestic Product (GDP)is $13 trillion, then unplanned inventories are

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

Dissaving is

Changes in real planned investment spending have

The consumption function shows the relationship between

The investment function is represented by

The consumption function shows the relationship between planned real consumption spending and

-Refer to the above figure. Line EBD is called

Suppose the marginal propensity to consume (MPC)is 0.8 and there is a $2,000 increase in autonomous consumption. Given this information, real GDP will increase by

Your real disposable income is your real income after you have paid

If the marginal propensity to consume (MPC)is 0.8 and there is a desire to increase real GDP by $500 billion, then

According to Keynes

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

Consumption goods are

In the Keynesian model, whenever planned investment is greater than planned saving

Suppose that the marginal propensity to consume (MPC)is .75 and there is an increase in investment spending of $100,000. As a result, equilibrium real Gross Domestic Product (GDP)would increase by

According to Keynes, the primary determinant of a person's saving is

In the consumption function model, the 45-degree line represents where

-Refer to the above figure. Which variable is autonomous with respect to real GDP?