Exam 10: Income and spending

In a Keynesian model of income determination, when intended spending is greater than actual output, the adjustment to a new macro-economic equilibrium is based on changes in

Assume a model with no government or foreign sector.If national income is Y = 800, autonomous consumption is Co = 100, and the marginal propensity to consume is c = 0.7, then total consumption is

Assume a model with no government or foreign sector.If actual output is $13.1 trillion while aggregate demand is $13.2 trillion, we know that

Generally speaking, the effect on income resulting from a change in investment spending is greater if

Assume a model where marginal propensity to save is 0.2, the marginal propensity to import is 0.1 and the marginal income tax rate is 0.25.What is the size of the expenditure multiplier?

If autonomous investment increases by 100 and government purchases decrease by 100, which of the following is true?

Assume a model of the expenditure sector with no government or foreign sector.If the savings function is defined as S = - 300 + (0.1)Y and autonomous investment increases by 200, by how much will consumption increase?

Assume a model with no government, where consumption is the only component of aggregate demand.If the consumption function is of the form C = 400 + (0.9)Y, what is the equilibrium level of consumption?

Assume the savings function is defined as S = - 200 + (0.25)YD and the marginal income tax rate is t = 0.5.If autonomous investment increased by 50, then the full-employment budget surplus would

Assume a simple model of the expenditure sector with no income taxes.If a lump sum tax decrease of 200 leads to an increase in income of 800, what is the size of the mps?

In a model with no government or foreign sector, if saving is defined as S = - 200 + (0.1)Y and investment is I? = 200, what is the equilibrium level of consumption?

Assume a model with an income tax rate of t = 0.25 and a marginal propensity to consume of c = 0.8.What could cause the level of equilibrium income to decrease by 1,000?

The size of the expenditure multiplier

In a model with income taxes, assume that autonomous investment decreases.Which of the following will be TRUE?

In a model with income taxes, an increase in autonomous imports will

In a model with income taxes, if net exports decrease, which of the following is FALSE?

The reason that an increase in autonomous spending leads to an even greater increase in equilibrium level of output is that

If there is no government or foreign sector and planned investment equals planned saving, then

Total autonomous spending

The expenditure multiplier measures