Question 1

The relationship between the real interest rate and investment is shown by the:

Accepted Answer

A)  investment demand schedule. 
B)  consumption of fixed capital schedule. 
C)  saving schedule. 
D)  aggregate supply curve. 
A)  investment demand schedule. 
B)  consumption of fixed capital schedule. 
C)  saving schedule. 
D)  aggregate supply curve.

Question 2

A decline in disposable income:

Accepted Answer

A)  increases consumption by moving upward along a specific consumption schedule. 
B)  decreases consumption because it shifts the consumption schedule downward. 
C)  decreases consumption by moving downward along a specific consumption schedule. 
D)  increases consumption because it shifts the consumption schedule upward. 
A)  increases consumption by moving upward along a specific consumption schedule. 
B)  decreases consumption because it shifts the consumption schedule downward. 
C)  decreases consumption by moving downward along a specific consumption schedule. 
D)  increases consumption because it shifts the consumption schedule upward.

Question 3

The greater the MPC,the greater the multiplier.

Accepted Answer

A) True 
 B)False

Question 4

Dissaving occurs where:

Accepted Answer

A)  income exceeds consumption. 
B)  saving exceeds consumption. 
C)  consumption exceeds income. 
D)  saving exceeds income. 
A)  income exceeds consumption. 
B)  saving exceeds consumption. 
C)  consumption exceeds income. 
D)  saving exceeds income.

Question 5

If business taxes are reduced and the real interest rate increases:

Accepted Answer

A)  consumption and saving will necessarily increase. 
B)  the level of investment spending might either increase or decrease. 
C)  the level of investment spending will necessarily increase. 
D)  the level of investment spending will necessarily decrease. 
A)  consumption and saving will necessarily increase. 
B)  the level of investment spending might either increase or decrease. 
C)  the level of investment spending will necessarily increase. 
D)  the level of investment spending will necessarily decrease.

Question 6

If the real interest rate in the economy is i and the expected rate of return from additional investment is r,then more investment will be forthcoming when:

Accepted Answer

A)  r falls. 
B)  i is greater than r. 
C)  r is greater than i. 
D)  i rises. 
A)  r falls. 
B)  i is greater than r. 
C)  r is greater than i. 
D)  i rises.

Question 7

Which one of the following will cause a movement down along an economy's consumption schedule?

Accepted Answer

A)  An increase in stock prices. 
B)  A decrease in stock prices. 
C)  An increase in consumer indebtedness. 
D)  A decrease in disposable income. 
A)  An increase in stock prices. 
B)  A decrease in stock prices. 
C)  An increase in consumer indebtedness. 
D)  A decrease in disposable income.

Question 8

If the marginal propensity to consume is .9,then the marginal propensity to save must be:

Accepted Answer

A)  1. 
B)  .1. 
C)  1.1. 
D)  .9. 
A)  1. 
B)  .1. 
C)  1.1. 
D)  .9.

Question 9

Economists widely agree that the value of the real-world multiplier is 2.5.

Accepted Answer

A) True 
 B)False

Question 10

At the point where the consumption schedule intersects the 45-degree line:

Accepted Answer

A)  the MPC is 1.00. 
B)  the APC is 1.00. 
C)  saving is equal to consumption. 
D)  the economy is in equilibrium. 
A)  the MPC is 1.00. 
B)  the APC is 1.00. 
C)  saving is equal to consumption. 
D)  the economy is in equilibrium.

The relationship between the real interest rate and investment is shown by the:

A decline in disposable income:

The greater the MPC,the greater the multiplier.

Dissaving occurs where:

If business taxes are reduced and the real interest rate increases:

If the real interest rate in the economy is i and the expected rate of return from additional investment is r,then more investment will be forthcoming when:

Which one of the following will cause a movement down along an economy's consumption schedule?

If the marginal propensity to consume is .9,then the marginal propensity to save must be:

Economists widely agree that the value of the real-world multiplier is 2.5.

At the point where the consumption schedule intersects the 45-degree line:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

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Exam 29: Basic Macroeconomic Relationships

The relationship between the real interest rate and investment is shown by the:

A decline in disposable income:

The greater the MPC,the greater the multiplier.

Dissaving occurs where:

If business taxes are reduced and the real interest rate increases:

If the real interest rate in the economy is i and the expected rate of return from additional investment is r,then more investment will be forthcoming when:

Which one of the following will cause a movement down along an economy's consumption schedule?

If the marginal propensity to consume is .9,then the marginal propensity to save must be:

Economists widely agree that the value of the real-world multiplier is 2.5.

At the point where the consumption schedule intersects the 45-degree line:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters