Exam 9: Aggregate Demand

The slope of a graph of the consumption function equals the marginal propensity to consume. The MPC represents the portion of disposable income that is spent rather than saved.

Disposable Income (Billions of dollars per year) Total Consumption (Billions of dollars per year) \ 0 \ 50 200 210 Table 9.1 What is the marginal propensity to consume in Table 9.1?

Using Figure 9.1,dissaving occurs at all income levels

The consumption function implies that

When consumer spending exceeds disposable income,all of the following are true except

When aggregate expenditures fall below the full-employment level of output,which of the following types of unemployment is most likely to increase?

Which of the following forces did Keynes assert had the strongest influence on consumption decisions?

The MPC in the economy depicted in Figure 9.3

State and local purchases of goods and services account for approximately _______ percent of total government purchases.

The marginal propensity to consume can be found by dividing

In Figure 9.8,if full-employment income is produced at $400 billion,the government can reduce a recessionary gap by

One In the News article titled "U.S.Leading Indicators Index Increases More Than Forecast" states that economic activity for this period should pick up in the next

Which of the following is true when an economy produces at full employment,but consumers,government,businesses,and the foreign sector do not buy all the output?

According to Figure 9.1,saving equals zero at an income level of

The consumption function will shift because of a change in current disposable income. There will be a movement along the consumption function due to a change in current disposable income.

In a graph with disposable income on the horizontal axis and consumption on the vertical axis,the intersection of the 45-degree line with the

Gross exports for the United States depend most directly on the

APC is equal to

If consumption and investment spending decline,then state and local government spending is likely to

Aggregate demand is the total quantity of output