Exam 10: Basic Macroeconomic Relationships

The most important determinant of consumer spending is:

The average propensity to consume can be defined as income divided by consumption.

If the saving schedule is a straight line,the:

As aggregate income decreases,the APC:

If the nominal interest rate is 18 percent and the real interest rate is 6 percent,the inflation rate is:

-Refer to the above diagram.The MPC and APC are both constant as income increases for:

The consumption schedule shows:

-Refer to the above diagram.The APC diminishes as income increases for:

A decline in the real interest rate will:

Refer to the data below.When plotted on a graph,the vertical intercept of the consumption schedule in this economy is _____ and the slope is _____.

The greater the MPC,the greater the multiplier.

If DI is $275 billion and the APC is 0.8,it can be concluded that saving is $55 billion.

Suppose a family's consumption exceeds its disposable income.This means that its:

-The above table reflects a(n):

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

Which of the following relations is not correct?

Following is consumption schedules for three private closed economies.DI signifies disposable income and C represents consumption expenditures.All figures are in billions of dollars. -Refer to the above data.At an income level of $400 billion,the average propensity to save in economy (2)is:

The multiplier effect means that:

Suppose the consumption schedule is: C = 20 + .9Y,where C is consumption and Y is disposable income. -Refer to the above data.The MPC is:

The following table illustrates the multiplier process in a private closed economy: -Refer to the above table.The change in income in round two will be: