Exam 10: Basic Macroeconomic Relationships

Refer to the consumption schedule above. At income level 3, the amount of saving is represented by the line segment:

Answer the following question based on the table below which illustrates the multiplier process resulting from an autonomous increase in investment by $5. Refer to the above table. The change in income in round two will be:

An increase in business taxes will tend to shift the investment-demand curve rightward.

During the Great Recession of 2007-2009, real interest rates:

An increase in taxes will shift both the consumption schedule and the saving schedule down.

If there is a decrease in disposable income in an economy, then:

Refer to the above figures with consumption schedules in figure (A) and saving schedules in figure (B), which correspond to each other across different levels of disposable income. If, in figure (A), consumption increases along line A₂ then in figure (B) there would be:

If disposable income decreases from $1800 to $1500 and MPC = 0.75, then saving will:

The wealth effect will tend to decrease consumption and increase saving.

Assume that an increase in a household's disposable income from $40,000 to $48,000 leads to an increase in consumption from $35,000 to $41,000, then the:

The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All figures are in billions of dollars. Refer to the data above. If plotted on a graph, the slope of the consumption schedule would be:

As the consumption and saving schedules relate to real GDP, an increase in taxes will shift:

In an economy, for every $10 million increase in disposable income, saving increases by $2 million. It can be concluded that the:

If the slope of a linear consumption schedule increases in a private closed economy, then it can be concluded that the:

If consumption increases while income remains the same, the average propensity to consume will:

A business firm will purchase additional capital goods if the real rate of interest in the economy is less than the expected rate of return from the investment.

An MPC value of less than 1.0 indicates that as income increases:

Refer to the graph above. Which of the following would shift the investment demand curve from ID₂ to ID₃?

During the Great Recession of 2007-2009, the investment demand curve shifted:

As disposable income decreases, consumption: