Exam 12: Consumption, real GDP, and the Multiplier

When you purchase Gap clothing and baseball tickets

Along a linear consumption function,

If the multiplier is 4,the marginal propensity to consume (MPC)must be

Saving is an example of

Saving differs from savings in that

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

As real disposable income increases,we expect the average propensity to consume (APC)

According to the Keynesian model,an increase in autonomous investment leads to

Suppose that the marginal propensity to consume (MPC)is .75 and there is an increase in investment spending of $100,000.As a result,equilibrium real Gross Domestic Product (GDP)would increase by

-In the above figure,a change in autonomous consumption to 100 would cause the consumption function to

When real planned saving is greater than real planned investment spending,

Another way of stating that investment is independent of real disposable income is to say that it is

Real consumption is a function of real disposable income,but the simple Keynesian model uses real GDP instead of real disposable income.This is appropriate since

-Use the above table.At an income of $50,

If the average propensity to consume is 1.0,the marginal propensity to consume is 0.8,and real disposable income increases by $100,the additional saving is

When the marginal propensity to consume (MPC)increases,

The consumption function shows how much

-Refer to the above figure.The figure represents the saving function for the consumer.Point B represents

The investment function tells us,at any given interest rate,

-In the above figure,what is autonomous consumption?