Exam 12: Consumption, Real GDP, and the Multiplier

If the marginal propensity to save is 0.4 and disposable income increases from $1,000 to $1,500, saving will increase

Along a linear consumption function,

Suppose autonomous consumption decreases. This reduction in autonomous consumption will cause which of the following to occur?

The terms "saving" and "savings" differ in that

If the multiplier in the economy is 3, the marginal propensity to save (MPS) must be

What would happen to the planned investment function if business taxes were increased?

Changes in business inventories are known as

-Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. The break-even level of real disposable income is

The consumption function shows the relationship

-Refer to the above figure. At real GDP of $1 trillion, actual investment equals

In equilibrium, real GDP is equal to

If your real disposable income goes up by $1,000 per week, and your real consumption spending goes up by $800 per week, you have an marginal propensity to save of

-In the above figure, when real disposable income equals 600

Investment is

Saving equals

If firms' unplanned inventories are increasing, then in a closed, private economy,

Investment spending is

An increase in the price level causes

Along the 45° reference line

Total planned expenditures in a closed economy are equal to