Exam 12: Consumption, real GDP, and the Multiplier

The 45-degree reference line indicates all points at which

Marginal propensity to consume

In the Keynesian model,consumption

Ignoring the government and foreign sectors,if planned investment spending is $500 billion,planned saving is $800 billion,and real Gross Domestic Product (GDP)is $13 trillion,then unplanned inventories will

If the marginal propensity to consume (MPC)is 0.75 and there is an increase in planned investment spending of $0.5 trillion,then saving will

An increase in the price level causes

Supposed actual investment is greater than planned investment at the current level of output in 2010.Given this information,we know that

In the Keynesian model,a decrease in real autonomous spending results in a more than proportional decrease in real Gross Domestic Product (GDP)because

An increase in real net exports leads to an increase in real GDP.Further,

Expenditures by firms on new machines and buildings that are expected to yield a future stream of income is known as

-Use the above table.The autonomous consumption in this table is

When the investment is graphed as a function of real GDP,

When real GDP is in equilibrium with no government and no international trade,

Which of the following statements is FALSE?

At the point at which the consumption function intersects the 45 degree reference line

Keynesian theory is based on the hypothesis that

Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP

Which of the following changes will shift the consumption function upward?

The marginal propensity to consume (MPC)is

In the simple Keynesian model,why does actual investment spending have to equal saving in the absence of the government and foreign sectors? Is this true only for the equilibrium? Explain.