Exam 12: Consumption, real GDP, and the Multiplier

In Keynesian analysis,if investment remains constant when income changes,the investment is called

If the aggregate supply curve is upward sloping,then an increase in autonomous consumption leads to a(n)

The marginal propensity to consume (MPC)

Which of the following is true?

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

Suppose real disposable income increases by $1,000.Given this information,we know that

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

The relationship between households' planned consumption expenditures and households' level of disposable real income is called

If disposable income = $200 billion and the APS = 0.9,then

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

If that the marginal propensity to save (MPS)increased from 0.20 to 0.25,this would cause the multiplier effect to

-Use the above table.We can infer from the table that when real disposable income is $175,

Suppose the economy is at an equilibrium when C + I + G + X = $12 trillion.If the economy is currently at a real national income level of $14 trillion,then total planned real expenditures

Autonomous consumption is defined as

The part of consumption that is independent of disposable income is called

When real Gross Domestic Product (GDP)exceeds total planned real expenditures,

-In the above figure,saving will equal zero when real disposable income equals

In the Keynesian model,planned investment is inversely related to

A decrease in interest rates will

Suppose the marginal propensity to consume is 0.75.What does this mean? What do we know about the marginal propensity to save? What do we know about the average propensity to consume?