Exam 9: Aggregate Expenditure

A grocery store manager must decide whether to buy four rug cleaners to rent to customers.The manager estimates that the first would yield $200 a year,the second $150,the third $75,and the fourth $20.If the interest rate is 12 percent and each rug cleaner costs $500,how many should the manager buy?

Which is true of disposable income?

Which of the following would not increase the Gallego family's real net wealth?

The marginal propensity to save is the fraction of a change in income that is saved.

Net exports

An increase in wealth will

What is the effect on the consumption function of an increase in disposable income?

If the MPC < 1 and a household's disposable income increases by $2,000,the household's consumption will

Which of the following would tend to shift the investment function upward?

Disposable income is equal to consumption

If the marginal propensity to consume is equal to 0.70 and income rises by $20 billion,then consumption spending will rise by

When economists say investment is autonomous,they mean that

Along the aggregate consumption function,an increase in income will

Which of the following is not an example of a government purchase?

The most important determinant of a household's consumption spending is

Which of the following is true regarding net taxes?

A household's net wealth is the value of

If a household's income falls from $26,000 to $24,000 and its consumption spending falls from $25,000 to $23,500,then its

Induced saving

New investment will be undertaken up to the point where the expected rate of return equals