Exam 11: Consumption, Real GDP, and the Multiplier

Dissaving occurs when

The relationship between planned consumption and real disposable income is referred to as

-In the above figure, at an income level of Y₁ and planned expenditures of (C + I)₁, the level of autonomous investment is

-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 consume when real disposable income equals $14,000?

Assuming that Yd = $20,000 and C = $22,000, we would find that the average propensity to save equals

-Use the above table. The MPC is

The part of consumption that is independent of disposable income is called

-Refer to the above figure. If real Gross Domestic Product (GDP)is $6 trillion, then unplanned business inventories will

The consumption function shows

If business executives become more optimistic about the future, we would expect that

Autonomous consumption is

-In the above figure, the sum of real planned investment spending, government expenditures, and net export spending is equal to

When graphing the consumption function, we include a 45-degree reference line. What is true at the points at which the consumption function crosses this line?

If society wants aggregate demand to increase without changes in the price level, then there must be

If the marginal propensity to consume (MPC)is 0.75, what is the value of the multiplier?

In the Keynesian model, an increase in real autonomous spending results in a greater increase in real Gross Domestic Product (GDP)if

If the MPC is 0.75, the multiplier is equal to

If the marginal propensity to consume (MPC)is 0.75 and government purchases increase by $200 billion, then

-Use the above table. At an income of $50

The marginal propensity to save is