Question 1

Explain the economic impact of an increase in the multiplier.

Accepted Answer

The multiplier magnifies the fluctuations in economic activity initiated by changes in consumption and investment spending.The larger the multiplier the greater will be the impact of any changes in spending on real GDP.

Question 2

What are the relationships between the multiplier and the marginal propensities to consume and save?

Accepted Answer

By definition,the multiplier is related to the marginal propensity to save because it equals 1/MPS.Thus,the multiplier and the MPS are inversely related.The multiplier is also related to the marginal propensity to consume because it also equals 1/(1-MPC).

Question 3

Complete the following table assuming that (a)MPS = 1/5, (b)there is no government and all saving is personal saving.

Accepted Answer

The answer of Complete the following table assuming that (a)MPS...

Question 4

What are the marginal propensity to consume (MPC)and marginal propensity to save (MPS)? How are the two concepts related? How are the two concepts related to the consumption and saving functions?

Accepted Answer

The marginal propensity to consume is th

Question 5

Use the graphs below to answer the following questions:

Accepted Answer

@#IMG-DLM& 
(a)What types of schedules do graphs A

Question 6

Complete the following table assuming that (a)MPS = 1/3, (b)there is no government and all saving is personal saving.

Accepted Answer

The answer of Complete the following table assuming that (a)MPS...

Question 7

Suppose that the linear equation for consumption in a hypothetical economy is C = 50 + 0.9 Y.Also suppose that income (Y)is $400.Determine the following: (a)MPC; (b)MPS; (c)level of consumption; (d)APC; (e)APS.

Accepted Answer

(a)MPC = 0.9.(b)MPS = 0.1.(c)A

Question 8

Describe the relationship between the size of the MPC and the multiplier.How does it compare to the relationship between the size of the MPS and the multiplier?

Accepted Answer

The size of the MPC and the mu

Question 9

What is the effect of increase in wealth on the consumption and saving schedules?

Accepted Answer

When wealth increases,it shifts the cons

Question 10

Describe the relationship between the Great Recession of 2008-2009 and the Paradox of Thrift.

Accepted Answer

The Great Recession of 2008-2009 altered

Question 11

State four factors that explain why investment spending tends to be unstable.

Accepted Answer

Investment spending is based to a large

Question 12

Complete the accompanying table.

Accepted Answer

@#IMG-DLM& 
(a)What is the break-even level of inc

Question 13

Define the consumption and saving schedules.

Accepted Answer

In the aggregate expenditures model one

Question 14

Use the following data to answer the questions.

Accepted Answer

@#IMG-DLM& 
(a)Explain why this table is essential

Question 15

List four factors that could shift the current consumption schedule.

Accepted Answer

Shifts in the current consumption schedu

Question 16

List six events that could cause a shift in the investment demand curve to the right.

Accepted Answer

The investment demand curve would shift

Question 17

Most economists regard investment demand as being less stable than the income-consumption relationship.Looking at the determinants of the two relationships,support this contention.

Accepted Answer

The non-income determinants of the incom

Question 18

Describe the relationship between the Great Recession of 2008-2009 and the Investment Riddle.

Accepted Answer

During the Great Recession of 2008-2009,

Question 19

Explain the difference between a movement along the consumption schedule and a shift in the consumption schedule.

Accepted Answer

A movement from one point to another on

Question 20

What are two key facts that serve as the rationale for the multiplier effect?

Accepted Answer

First,the economy has continuous flows o

Explain the economic impact of an increase in the multiplier.

What are the relationships between the multiplier and the marginal propensities to consume and save?

Complete the following table assuming that (a)MPS = 1/5, (b)there is no government and all saving is personal saving.

What are the marginal propensity to consume (MPC)and marginal propensity to save (MPS)? How are the two concepts related? How are the two concepts related to the consumption and saving functions?

Use the graphs below to answer the following questions:

Complete the following table assuming that (a)MPS = 1/3, (b)there is no government and all saving is personal saving.

Suppose that the linear equation for consumption in a hypothetical economy is C = 50 + 0.9 Y.Also suppose that income (Y)is $400.Determine the following: (a)MPC; (b)MPS; (c)level of consumption; (d)APC; (e)APS.

Describe the relationship between the size of the MPC and the multiplier.How does it compare to the relationship between the size of the MPS and the multiplier?

What is the effect of increase in wealth on the consumption and saving schedules?

Describe the relationship between the Great Recession of 2008-2009 and the Paradox of Thrift.

State four factors that explain why investment spending tends to be unstable.

Complete the accompanying table.

Define the consumption and saving schedules.

Use the following data to answer the questions.

List four factors that could shift the current consumption schedule.

List six events that could cause a shift in the investment demand curve to the right.

Most economists regard investment demand as being less stable than the income-consumption relationship.Looking at the determinants of the two relationships,support this contention.

Describe the relationship between the Great Recession of 2008-2009 and the Investment Riddle.

Explain the difference between a movement along the consumption schedule and a shift in the consumption schedule.

What are two key facts that serve as the rationale for the multiplier effect?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

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Exam 10: Basic Macroeconomic Relationships

Explain the economic impact of an increase in the multiplier.

What are the relationships between the multiplier and the marginal propensities to consume and save?

Complete the following table assuming that (a)MPS = 1/5, (b)there is no government and all saving is personal saving.

What are the marginal propensity to consume (MPC)and marginal propensity to save (MPS)? How are the two concepts related? How are the two concepts related to the consumption and saving functions?

Use the graphs below to answer the following questions:

Complete the following table assuming that (a)MPS = 1/3, (b)there is no government and all saving is personal saving.

Suppose that the linear equation for consumption in a hypothetical economy is C = 50 + 0.9 Y.Also suppose that income (Y)is $400.Determine the following: (a)MPC; (b)MPS; (c)level of consumption; (d)APC; (e)APS.

Describe the relationship between the size of the MPC and the multiplier.How does it compare to the relationship between the size of the MPS and the multiplier?

What is the effect of increase in wealth on the consumption and saving schedules?

Describe the relationship between the Great Recession of 2008-2009 and the Paradox of Thrift.

State four factors that explain why investment spending tends to be unstable.

Complete the accompanying table.

Define the consumption and saving schedules.

Use the following data to answer the questions.

List four factors that could shift the current consumption schedule.

List six events that could cause a shift in the investment demand curve to the right.

Most economists regard investment demand as being less stable than the income-consumption relationship.Looking at the determinants of the two relationships,support this contention.

Describe the relationship between the Great Recession of 2008-2009 and the Investment Riddle.

Explain the difference between a movement along the consumption schedule and a shift in the consumption schedule.

What are two key facts that serve as the rationale for the multiplier effect?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters