Exam 12: Consumption, Real GDP, and the Multiplier

At the point at which planned real consumption spending is equal to real disposable income

-Consider the above figure. At an income of $60 we would expect saving to be equal to

Which of the following is TRUE?

The marginal propensity to save is

-Use the above table. Which of the following is TRUE if real disposable income is $150?

Autonomous real investment spending is

An increase in the price level causes

Which one of the following would shift your consumption function in an upward direction?

As real disposable income decreases, the average propensity to consume (APC)

In the Keynesian model, consumption

Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to save (MPS) is

In the Keynesian model, whenever planned saving is more than planned investment

-Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What does planned real saving equal when real disposable income equals $1200?

The marginal propensity to consume explains how much of the next dollar of disposable income

Based on historical data, which of the following tended to be most unstable over time?

The equation is the

Suppose equilibrium for an economy occurs when C + I + G + X = $14 trillion. If the real Gross Domestic Product (GDP) is $13 trillion, then unplanned inventories are

According to Keynes, planned consumption

When graphing the consumption function, we include a 45-degree reference line. What is TRUE at the points at which the consumption function crosses this line?

Along the portion of the consumption function that lies above the 45-degree line, saving is