Exam 12: Consumption, real GDP, and the Multiplier

Assuming that = $20,000 and C = $22,000,we would find that the average propensity to consume would be equal to

In equilibrium,real GDP is equal to

The average price of a share of stock on the New York Stock Exchange falls by 30 percent.Other things being equal,we would expect

According to the permanent income hypothesis,a temporary increase in income that does not affect average lifetime income would

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

-According to the above table,the value of MPS is ________.

In the consumption function model,the 45-degree line represents where

According to Keynes,real saving and real consumption spending are functions of

The larger the value of the marginal propensity to save (MPS),

-In the above figure,at the equilibrium level of real GDP,there is

Consider a closed economy without a government and without international trade.What will be true when this economy is in equilibrium?

What happens as interest rates fall?

In the Keynesian model,government spending is considered

Suppose the economy is initially at equilibrium,in which total planned real expenditures equals real GDP.Which of the following will occur if there is an increase in autonomous investment?

-In the above figure,the equilibrium level of planned saving plus net taxes is

-Refer to the above figure.Saving occurs at

An increase in the interest rate will cause

In a closed economy,equilibrium real Gross Domestic Product (GDP)occurs where

Ignoring the government and foreign sectors,equilibrium real Gross Domestic Product (GDP)is determined by

With reference to the consumption function,the 45-degree line represents