Exam 12: Consumption, Real GDP, and the Multiplier

In the Keynesian model, government spending is considered

Dissaving occurs when

The relationship between planned real consumption expenditures of households and their current level of real disposable income is

When the SRAS curve slopes upward, the actual affect of an increase in real autonomous spending on equilibrium real GDP is smaller than predicted by the multiplier because

All of the following are flow variables EXCEPT

Technological progress should lead to

Of the following economic variables, which is the least stable over time?

The average propensity to consume is the

At the break-even point for the consumption function

If an economy saves 20 percent of any increase in real Gross Domestic Product (GDP), then an increase in investment of $1 billion can produce an increase in real Gross Domestic Product (GDP) of as much as

-Refer to the above figure. The point at which saving equals zero is

An increase in the marginal propensity to save (MPS)

Which of the following will cause an inward shift of the investment function?

What is the result when real planned saving is lower than real planned investment spending?

If initial equilibrium real Gross Domestic Product (GDP) is $500 billion, MPC = 0.9, and autonomous investment increases $40 billion, equilibrium real Gross Domestic Product (GDP) will be

Other things being constant, if the marginal propensity to save (MPS) is 0.2, and private investment spending falls by $100 million, then real Gross Domestic Product (GDP)

Government purchases

If real Gross Domestic Product (GDP) is above its equilibrium level

Assuming that Yd = $10,000 and C = $12,000, we would find that the average propensity to consume would be equal to

The investment function intersects the saving schedule at an interest rate of 8 percent and a level of investment of $1.5 trillion a year. If the consumption curve intersects the 45-degree reference line at $3 trillion, then