Exam 12: Consumption, real GDP, and the Multiplier

The multiplier helps explain

If the marginal propensity to save is 0.4 and disposable income increases from $1,000 to $1,500,saving will increase

Which of the following is NOT a flow variable?

-Refer to the above figure.If real Gross Domestic Product (GDP)is $6 trillion,then unplanned business inventories will

The ratio of the change in consumption to the change in disposable income is the

If business executives become more optimistic about the future,we would expect that

What is the multiplier? How is it calculated? Why is the multiplier related only to consumption spending?

If the marginal propensity to consume (MPC)is 0.9,the spending multiplier will be

Consumption expenditures include all of the following EXCEPT

-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 is the value of the average propensity to consume when real disposable income equals $14,000?

If an economy saves 20 percent of any increase in real Gross Domestic Product (GDP),then an increase in investment of $2 billion can produce an increase in real Gross Domestic Product (GDP)of as much as

Autonomous consumption is

-Refer to the above figure.The equilibrium level of real GDP occurs

Where the consumption function intersects the 45-degree line,

-Consider the above figure.The equation for the saving function is

Savings are an example of

-According to the above figure,at an income level of Y1,

In the graph for the consumption function,the 45-degree line

-Refer to the above table.Which variables in the table are NOT autonomous?

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