Exam 12: Consumption, Real GDP, and the Multiplier

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

If real disposable income increases, the average propensity to consume will

When an individual spends more than her/his disposable income, this person is

The consumption function will shift with

If initial equilibrium real Gross Domestic Product (GDP) is $400 billion, MPC = 0.9, and autonomous investment increases $40 billion, equilibrium real Gross Domestic Product (GDP) will be

As real disposable income increases, we expect the average propensity to consume (APC)

Fixed investment is

-According to the above figure, planned consumption and income are equal at an income level of

Average propensity to consume

-Refer to the above figure. Saving occurs at

When the SRAS curve slopes upward, the actual affect of an increase in real autonomous spending on equilibrium real GDP is smaller than predicted by the multiplier because

-In the above table, the average propensity to consume when income is $10,000 is

When the investment is graphed as a function of real GDP,

In the Keynesian model, a decrease in real autonomous spending results in a more than proportional decrease in real Gross Domestic Product (GDP) because

If the multiplier is 4, the marginal propensity to consume (MPC) must be

How much people plan to consume at various levels of disposable income is known as

-Refer to the above table. When real GDP equals $16 trillion,

According to Keynesian theory, the most important determinant of saving and consumption is

All of the following are flow variables EXCEPT

Where the consumption function intersects the 45-degree line,