FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Aggregate Demand

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

The change in total spending from additional income is

A) MPC.
B) MPS.
C) APC.
D) APS.

Correct Answer

verified

Show Answer

Question 42

Essay

Review LaterAdd Note

Review Later

What must the value of the average propensity to save (APS)be if the average propensity to consume (APC)is greater than 1? Why?

Correct Answer

verified

The APS must be negative if the APC is g...

View Answer

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

The investment demand curve would shift to the left because of

If,in the aggregate,consumers spend 75 cents of every extra dollar received,then the

Keynes asserted that wealth was the most important determinant of consumer spending.

Refer to Table 9.2.(Data are expressed in billions of dollars. ) Table 9.2 $\begin{array}{|r|r|r|c|c|}\hline \begin{array}{r}\text { Full Employment } \\\text { Income (Output) }\end{array} & \begin{array}{c}\text { Consumers } \\\text { Desire to Spend }\end{array} & \begin{array}{c}\text { Investors Desire } \\\text { to Spend }\end{array} & \begin{array}{c}\text { Total Private } \\\text { Spending }\end{array} & \begin{array}{c}\text { Total } \\\text { Saving }\end{array} \\\hline \$ 500 & \$ 300 & \$ 250 & \$ & \$ \\\hline 600 & 375 & 250 & \$ & \$ \\\hline 700 & 450 & 250 & \$ & \$ \\\hline 800 & 525 & 250 & \$ & \$ \\\hline\end{array}$ If the full-employment level of income (Y_F) in Table 9.2 is $800 billion,

What are the two types of consumer spending as identified by Keynes,and what are the determinants of each?

In a graph with disposable income on the horizontal axis and consumption on the vertical axis,the intersection of the 45-degree line with the

The combination of price level and real output that is compatible with both aggregate demand and aggregate supply is the definition of

If the MPC is 0.60 and disposable income increases from $20,000 billion to $22,000 billion,consumption will increase by

The MPC + MPS must always equal

Consumption expenditures

A recessionary gap implies that

If autonomous consumption decreases,then

APC is equal to

Table 9.1 $\begin{array} { | l | c | } \hline \begin{array} { c } \text { Disposable Income } \\\text { (Billions of dollars per year) }\end{array} & \begin{array} { c } \text { Total Consumption } \\\text { (Billions of dollars per year) }\end{array} \\\hline \text { \$0 } & \$ 50 \\\hline 200 & 210 \\\hline\end{array}$ What is the rate of saving when income equals $300 billion in Table 9.1?

Table 9.1 $\begin{array} { | l | c | } \hline \begin{array} { c } \text { Disposable Income } \\\text { (Billions of dollars per year) }\end{array} & \begin{array} { c } \text { Total Consumption } \\\text { (Billions of dollars per year) }\end{array} \\\hline \text { \$0 } & \$ 50 \\\hline 200 & 210 \\\hline\end{array}$ What is the marginal propensity to save in Table 9.1?

If tax policies become less favorable,then

A recessionary gap

If an increase in disposable income causes consumption to increase from $4,000 to $10,000 and causes saving to increase from $2,000 to $4,000,it can be inferred that the MPC equals