Question 1

A decrease in the price level will

Accepted Answer

A) shift the consumption function upward 
B) make the consumption function steeper 
C) result in a movement upward along the consumption function 
D) result in a movement downward along the consumption function 
E) have no effect on the consumption function 
A) shift the consumption function upward 
B) make the consumption function steeper 
C) result in a movement upward along the consumption function 
D) result in a movement downward along the consumption function 
E) have no effect on the consumption function

Question 2

Which of the following is true regarding net taxes?

Accepted Answer

A) The level of net taxes varies directly with the level of transfer payments. 
B) The level of net taxes varies inversely with the level of taxes. 
C) Net taxes must always be less than zero. 
D) Net taxes increase when income tax rates are slashed. 
E) Net taxes rise when welfare benefits are cut. 
A) The level of net taxes varies directly with the level of transfer payments. 
B) The level of net taxes varies inversely with the level of taxes. 
C) Net taxes must always be less than zero. 
D) Net taxes increase when income tax rates are slashed. 
E) Net taxes rise when welfare benefits are cut.

Question 3

An upward shift of the investment function (i.e., the one that relates investment spending to income) could be caused by

Accepted Answer

A) an increase in income 
B) a decrease in the interest rate 
C) an increase in the interest rate 
D) more pessimistic business expectations 
E) an increase in business taxes 
A) an increase in income 
B) a decrease in the interest rate 
C) an increase in the interest rate 
D) more pessimistic business expectations 
E) an increase in business taxes

Question 4

The MPC is a relationship between

Accepted Answer

A) a change in consumption and a change in income 
B) a change in consumption and a change in saving 
C) changes in consumption and changes in saving 
D) the ratio of income to consumption at any given level of income 
E) the total level of consumption and the total level of saving 
A) a change in consumption and a change in income 
B) a change in consumption and a change in saving 
C) changes in consumption and changes in saving 
D) the ratio of income to consumption at any given level of income 
E) the total level of consumption and the total level of saving

Question 5

If every time disposable income increases by $5 billion, consumption increases by $4 billion and saving increases by $1 billion, the MPC and MPS are, respectively,

Accepted Answer

A) 1/4, 1/2 
B) 1/2, 1/2 
C) 1, 0 
D) 4/5, 1/5 
E) the answer is indeterminate from the information given 
A) 1/4, 1/2 
B) 1/2, 1/2 
C) 1, 0 
D) 4/5, 1/5 
E) the answer is indeterminate from the information given

Question 6

Which of the following will not shift the consumption function upward?

Accepted Answer

A) a drop in the price level 
B) an increase in net wealth 
C) a drop in the interest rate 
D) expectations of lower future income 
E) expectations of higher prices in the future 
A) a drop in the price level 
B) an increase in net wealth 
C) a drop in the interest rate 
D) expectations of lower future income 
E) expectations of higher prices in the future

Question 7

Suppose that when disposable income rises from $3 trillion to $3.2 trillion, consumption rises from $2.5 trillion to $2.6 trillion. What is the marginal propensity to save?

Accepted Answer

A) 0.1 
B) 0.2 
C) 0.5 
D) 0.8 
E) 0.9 
A) 0.1 
B) 0.2 
C) 0.5 
D) 0.8 
E) 0.9

A decrease in the price level will

Which of the following is true regarding net taxes?

An upward shift of the investment function (i.e., the one that relates investment spending to income) could be caused by

The MPC is a relationship between

If every time disposable income increases by $5 billion, consumption increases by $4 billion and saving increases by $1 billion, the MPC and MPS are, respectively,

Which of the following will not shift the consumption function upward?

Suppose that when disposable income rises from $3 trillion to $3.2 trillion, consumption rises from $2.5 trillion to $2.6 trillion. What is the marginal propensity to save?

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand Supply and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

The Algebra of Income and Expenditure

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

The Algebra of Demand-Side Equilibrium

International Trade

International Finance

Economic Development

National Income Accounts

Understanding Graphs

Variable Net Exports

Variable Net Exports Revisited

Filters

Exam 9: Aggregate Expenditure

A decrease in the price level will

Which of the following is true regarding net taxes?

An upward shift of the investment function (i.e., the one that relates investment spending to income) could be caused by

The MPC is a relationship between

If every time disposable income increases by $5 billion, consumption increases by $4 billion and saving increases by $1 billion, the MPC and MPS are, respectively,

Which of the following will not shift the consumption function upward?

Suppose that when disposable income rises from $3 trillion to $3.2 trillion, consumption rises from $2.5 trillion to $2.6 trillion. What is the marginal propensity to save?

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand Supply and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

The Algebra of Income and Expenditure

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

The Algebra of Demand-Side Equilibrium

International Trade

International Finance

Economic Development

National Income Accounts

Understanding Graphs

Variable Net Exports

Variable Net Exports Revisited

Filters