Question 1

If the marginal propensity to consume is 0.9 in a private closed economy,a $20 billion decline in investment spending will decrease:

Accepted Answer

A)   GDP by $20 billion.
B)   GDP by $100 billion.
C)   saving by $20 billion.
D)   consumption by $200 billion.E) B) and C)
F) All of the above

Question 2

The slope of the consumption schedule is measured by the MPC.

Accepted Answer

A) True 
 B)False

Question 3

A decline in disposable income:

Accepted Answer

A)   increases consumption by moving upward along a specific consumption schedule.
B)   decreases consumption because it shifts the consumption schedule downward.
C)   decreases consumption by moving downward along a specific consumption schedule.
D)   increases consumption because it shifts the consumption schedule upward.E) A) and B)
F) A) and C)

Question 4

If the marginal propensity to save is 0.2 in a private closed economy,a $20 billion rise in investment spending will increase:

Accepted Answer

A)   GDP by $120 billion.
B)   GDP by $20 billion.
C)   saving by $25 billion.
D)   consumption by $80 billion.E) C) and D)
F) A) and B)

Question 5

Refer to the data below.The MPS is:

Accepted Answer

A)   7/10.
B)   3/10.
C)   2/5.
D)   3/5.E) All of the above
F) B) and D)

Question 6

If the consumption schedule shifts upward and the shift was not caused by a tax change,the saving schedule:

Accepted Answer

A)   will not shift.
B)   may shift either upward or downward.
C)   will shift downward.
D)   will also shift upward.E) B) and C)
F) A) and B)

Question 7

The relationship between the real interest rate and investment is shown by the:

Accepted Answer

A)   investment-demand schedule.
B)   consumption of fixed capital schedule.
C)   saving schedule.
D)   aggregate supply curve.E) A) and B)
F) All of the above

Exam 10: Basic Macroeconomic Relationships

If the marginal propensity to save is 0.2 in a private closed economy,a $20 billion rise in investment spending will increase:

Correct Answer
verified

A decline in disposable income:

Correct Answer
verified

The relationship between the real interest rate and investment is shown by the:

Correct Answer
verified

If the consumption schedule shifts upward and the shift was not caused by a tax change,the saving schedule:

Correct Answer
verified

The slope of the consumption schedule is measured by the MPC.

Correct Answer
verified

If the marginal propensity to consume is 0.9 in a private closed economy,a $20 billion decline in investment spending will decrease:

Correct Answer
verified

Refer to the data below.The MPS is:

Correct Answer
verified

Exam 10: Basic Macroeconomic Relationships

If the marginal propensity to save is 0.2 in a private closed economy,a $20 billion rise in investment spending will increase:

Correct AnswerverifiedShow Answer

A decline in disposable income:

Correct AnswerverifiedShow Answer

The relationship between the real interest rate and investment is shown by the:

Correct AnswerverifiedShow Answer

If the consumption schedule shifts upward and the shift was not caused by a tax change,the saving schedule:

Correct AnswerverifiedShow Answer

The slope of the consumption schedule is measured by the MPC.

Correct AnswerverifiedShow Answer

If the marginal propensity to consume is 0.9 in a private closed economy,a $20 billion decline in investment spending will decrease:

Correct AnswerverifiedShow Answer

Refer to the data below.The MPS is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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