Question 1

Changes in the price level will not shift the consumption function.

Accepted Answer

A) True 
 B)False

Question 2

A grocery store manager must decide whether to buy a rug cleaner to rent to customers.The cleaner costs $800.It is expected to yield $200 in income per year.What is the expected annual rate of return from the cleaner?

Accepted Answer

A) $600 
B) $200 
C) 400 percent 
D) 75 percent 
E) 25 percent 
A) $600 
B) $200 
C) 400 percent 
D) 75 percent 
E) 25 percent

Question 3

The slope of the consumption function shows how

Accepted Answer

A) consumption changes over time 
B) consumption changes as household size changes 
C) consumption changes as the price level changes 
D) income changes as the level of consumption changes 
E) consumption changes as the level of income changes 
A) consumption changes over time 
B) consumption changes as household size changes 
C) consumption changes as the price level changes 
D) income changes as the level of consumption changes 
E) consumption changes as the level of income changes

Question 4

The current level of investment depends on the current level of income.

Accepted Answer

A) True 
 B)False

Question 5

Suppose that when disposable income rises from $3 trillion to $3.2 trillion,consumption rises from $2.5 trillion to $2.6 trillion.What is the marginal propensity to consume?

Accepted Answer

A) 0.1 
B) 0.2 
C) 0.5 
D) 0.8 
E) 0.9 
A) 0.1 
B) 0.2 
C) 0.5 
D) 0.8 
E) 0.9

Question 6

Which of the following would not increase the Gallego family's real net wealth?

Accepted Answer

A) an increase in the value of their home 
B) an increase in the value of Mrs.Gallego's pension fund 
C) an increase in the amount that the Gallegos have saved in the bank 
D) a rise in the price level 
E) a decrease in the size of the mortgage payments on the Gallego's home 
A) an increase in the value of their home 
B) an increase in the value of Mrs.Gallego's pension fund 
C) an increase in the amount that the Gallegos have saved in the bank 
D) a rise in the price level 
E) a decrease in the size of the mortgage payments on the Gallego's home

Question 7

Which of the following would be most likely to cause a rightward shift of the investment demand curve?

Accepted Answer

A) an increase in income 
B) a decline in the market interest rate 
C) an improvement in business expectations 
D) an increase in the market rate of interest 
E) a decrease in income 
A) an increase in income 
B) a decline in the market interest rate 
C) an improvement in business expectations 
D) an increase in the market rate of interest 
E) a decrease in income

Question 8

If income increases by $100 and consumption increases by $75,the slope of the consumption function equals

Accepted Answer

A) 1/4 
B) 1/5 
C) 1/2 
D) 3/4 
E) 3/5 
A) 1/4 
B) 1/5 
C) 1/2 
D) 3/4 
E) 3/5

Question 9

An increase in the price level will

Accepted Answer

A) increase consumption because goods are more expensive 
B) make the consumption function steeper 
C) increase consumption because wages will increase 
D) decrease consumption because falling interest rates make it cheaper to borrow 
E) decrease consumption because the value of net wealth has decreased 
A) increase consumption because goods are more expensive 
B) make the consumption function steeper 
C) increase consumption because wages will increase 
D) decrease consumption because falling interest rates make it cheaper to borrow 
E) decrease consumption because the value of net wealth has decreased

Changes in the price level will not shift the consumption function.

A grocery store manager must decide whether to buy a rug cleaner to rent to customers.The cleaner costs $800.It is expected to yield $200 in income per year.What is the expected annual rate of return from the cleaner?

The slope of the consumption function shows how

The current level of investment depends on the current level of income.

Suppose that when disposable income rises from $3 trillion to $3.2 trillion,consumption rises from $2.5 trillion to $2.6 trillion.What is the marginal propensity to consume?

Which of the following would not increase the Gallego family's real net wealth?

Which of the following would be most likely to cause a rightward shift of the investment demand curve?

If income increases by $100 and consumption increases by $75,the slope of the consumption function equals

An increase in the price level will

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Baggregate Expenditure and Aggregate Demand

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

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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Exam 9: Aaggregate Expenditure and Aggregate Demand

Changes in the price level will not shift the consumption function.

A grocery store manager must decide whether to buy a rug cleaner to rent to customers.The cleaner costs $800.It is expected to yield $200 in income per year.What is the expected annual rate of return from the cleaner?

The slope of the consumption function shows how

The current level of investment depends on the current level of income.

Suppose that when disposable income rises from $3 trillion to $3.2 trillion,consumption rises from $2.5 trillion to $2.6 trillion.What is the marginal propensity to consume?

Which of the following would not increase the Gallego family's real net wealth?

Which of the following would be most likely to cause a rightward shift of the investment demand curve?

If income increases by $100 and consumption increases by $75,the slope of the consumption function equals

An increase in the price level will

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Baggregate Expenditure and Aggregate Demand

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

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

Filters