Exam 11: Consumption, Real GDP, and the Multiplier

-Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the marginal propensity to consume?

Technological progress should lead to

-Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the average propensity to save when real disposable income equals $4,000?

The equation is the

Ignoring the government and foreign sectors, if planned investment spending is $500 billion, planned saving is $800 billion, and real Gross Domestic Product (GDP)is $13 trillion, then unplanned inventories will

In the Keynesian model with government and the foreign sector added, what are the components of spending? Which of these components are autonomous and which are not? How is the equilibrium found? When the economy is not at an equilibrium, what adjustments are made?

-In the above table, the marginal propensity to consume when disposable income changes from $5,000 to $6,000 is

What effect would taxation have on real consumption spending when government spending is autonomous?

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

Which of the following is TRUE?

The stock of assets owned by a person, household, firm or nation is

If that the marginal propensity to save (MPS)increased from 0.20 to 0.25, this would cause the multiplier effect to

-According to the above figure, autonomous consumption equals

An increase in the interest rate results in

Assuming that Yd = $20,000 and C = $22,000, we would find that the average propensity to consume would be equal to

If the marginal propensity to consume (MPC)is 0.75 and there is an increase in planned investment spending of $0.5 trillion, then saving will

According to the Keynesian model, what are the two components of consumption spending? What determines how consumption changes when real disposable income changes? Explain.

Which of the following does NOT occur when the economy is operating at the equilibrium level of GDP?

If, at some level of output, total planned real expenditures are less than real Gross Domestic Product (GDP)

If the MPS is one-third, a $100 increase in net exports will