Question 1

The slope of the consumption function equals the marginal propensity to consume.​

Accepted Answer

A) True 
 B)False

Question 2

The main determinants of investment are the interest rates and expected profit.​

Accepted Answer

A) True 
 B)False

Question 3

If the simple spending multiplier is 8,the marginal propensity to consume is _____.​

Accepted Answer

A) 1/8 
B) 1/4​ 
C) 4/5​ 
D) 7/8​ 
E) 8​ 
A) 1/8 
B) 1/4​ 
C) 4/5​ 
D) 7/8​ 
E) 8​

Question 4

The table given below shows the real gross domestic product (GDP),consumption,and planned investment in an economy.The marginal propensity to consume (MPC)in the economy is:​ ​
Table 9.3
​

Accepted Answer

A) 0. 
B) 0.2. 
C) 0.8. 
D) 0.9. 
E) 80. 
A) 0. 
B) 0.2. 
C) 0.8. 
D) 0.9. 
E) 80.

Question 5

Expectations that the price level will increase in the future will:​

Accepted Answer

A) shift the current consumption function upward. 
B) make the current consumption function steeper. 
C) make the current consumption function flatter. 
D) result in a downward movement along the current consumption function. 
E) shift the current consumption function downward. 
A) shift the current consumption function upward. 
B) make the current consumption function steeper. 
C) make the current consumption function flatter. 
D) result in a downward movement along the current consumption function. 
E) shift the current consumption function downward.

Question 6

The figure given below shows the income-expenditure model.Which of the following best describes the situation at point B?​ ​
Figure 9.1
​

Accepted Answer

A) Consumption expenditure exceeds disposable income 
B) Real GDP exceeds aggregate expenditure​ 
C) Aggregate expenditure is exactly equal to real GDP​ 
D) Aggregate expenditure exceeds real GDP​ 
E) Producers experience an unexpected accumulation of inventory​ 
A) Consumption expenditure exceeds disposable income 
B) Real GDP exceeds aggregate expenditure​ 
C) Aggregate expenditure is exactly equal to real GDP​ 
D) Aggregate expenditure exceeds real GDP​ 
E) Producers experience an unexpected accumulation of inventory​

Question 7

If a household's income falls from $20,000 to $17,000 and its consumption spending falls from $18,000 to $15,000,then its:​

Accepted Answer

A) marginal propensity to consume is −0.67. 
B) marginal propensity to consume is 0.88. 
C) marginal propensity to consume is 0.20. 
D) marginal propensity to save is 0. 
E) marginal propensity to save is 0.12. 
A) marginal propensity to consume is −0.67. 
B) marginal propensity to consume is 0.88. 
C) marginal propensity to consume is 0.20. 
D) marginal propensity to save is 0. 
E) marginal propensity to save is 0.12.

Question 8

If the price level in an economy increases,other things constant,consumption spending is likely to _____.​

Accepted Answer

A) increase because real income increases 
B) decrease because real income increases​ 
C) increase because the real value of wealth increases​ 
D) decrease because the real value of wealth decreases​ 
E) increase because nominal income increases​ 
A) increase because real income increases 
B) decrease because real income increases​ 
C) increase because the real value of wealth increases​ 
D) decrease because the real value of wealth decreases​ 
E) increase because nominal income increases​

Question 9

A decrease in net wealth will _____.​

Accepted Answer

A) shift the consumption function downward 
B) make the consumption function steeper​ 
C) cause an upward movement along the consumption function​ 
D) cause a downward movement along the consumption function​ 
E) make the consumption function flatter​ 
A) shift the consumption function downward 
B) make the consumption function steeper​ 
C) cause an upward movement along the consumption function​ 
D) cause a downward movement along the consumption function​ 
E) make the consumption function flatter​

Question 10

If there are no unintended changes in inventories,the economy is at its equilibrium level of real gross domestic product (GDP)demanded.​

Accepted Answer

A) True 
 B)False

The slope of the consumption function equals the marginal propensity to consume.

The main determinants of investment are the interest rates and expected profit.

If the simple spending multiplier is 8,the marginal propensity to consume is _____.

The table given below shows the real gross domestic product (GDP),consumption,and planned investment in an economy.The marginal propensity to consume (MPC)in the economy is: Table 9.3

Expectations that the price level will increase in the future will:

The figure given below shows the income-expenditure model.Which of the following best describes the situation at point B? Figure 9.1

If a household's income falls from $20,000 to $17,000 and its consumption spending falls from $18,000 to $15,000,then its:

If the price level in an economy increases,other things constant,consumption spending is likely to _____.

A decrease in net wealth will _____.

If there are no unintended changes in inventories,the economy is at its equilibrium level of real gross domestic product (GDP)demanded.

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 9: Aggregate Demand

The slope of the consumption function equals the marginal propensity to consume.​

The main determinants of investment are the interest rates and expected profit.​

If the simple spending multiplier is 8,the marginal propensity to consume is _____.​

The table given below shows the real gross domestic product (GDP),consumption,and planned investment in an economy.The marginal propensity to consume (MPC)in the economy is:​ ​ Table 9.3 ​

Expectations that the price level will increase in the future will:​

The figure given below shows the income-expenditure model.Which of the following best describes the situation at point B?​ ​ Figure 9.1 ​

If a household's income falls from $20,000 to $17,000 and its consumption spending falls from $18,000 to $15,000,then its:​

If the price level in an economy increases,other things constant,consumption spending is likely to _____.​

A decrease in net wealth will _____.​

If there are no unintended changes in inventories,the economy is at its equilibrium level of real gross domestic product (GDP)demanded.​

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

The slope of the consumption function equals the marginal propensity to consume.

The main determinants of investment are the interest rates and expected profit.

If the simple spending multiplier is 8,the marginal propensity to consume is _____.

The table given below shows the real gross domestic product (GDP),consumption,and planned investment in an economy.The marginal propensity to consume (MPC)in the economy is: Table 9.3

Expectations that the price level will increase in the future will:

The figure given below shows the income-expenditure model.Which of the following best describes the situation at point B? Figure 9.1

If a household's income falls from $20,000 to $17,000 and its consumption spending falls from $18,000 to $15,000,then its:

If the price level in an economy increases,other things constant,consumption spending is likely to _____.

A decrease in net wealth will _____.

If there are no unintended changes in inventories,the economy is at its equilibrium level of real gross domestic product (GDP)demanded.