Exam 9: Aggregate Expenditures

-Refer to Table 9.2. If a firm purchases the machine by taking out a one-year loan, what happens to the firm's rate of return on the investment if the interest rate increases to 10 percent?

In the table given below Y represents the aggregate expenditure of the economy on C = consumption, I = investment, G = government projects, and X = net exports.? -Refer to Table 9.3. Compute the marginal propensity to save in the economy.

The figure given below shows the consumption function of a household.?Figure 9.2 -In Figure 9.2, the line segment AD represents:

Identify the correct statement with respect to consumption and saving function.

The figure given below represents the consumption function of a country.?Figure 9.3 -Refer to Figure 9.3. When disposable income is $800, consumption spending must equal:

As disposable income rises:

The figure given below shows the aggregate expenditures function of an economy.?Figure 9.5 -Refer to Figure 9.5. Which of the following statements is true?

If disposable income rises from $15,000 to $20,000 and the marginal propensity to consume equals 0.9, then saving must increase by $500.

If a household's disposable income increases from $50,000 to $100,000 and its consumption increases from $40,000 to $80,000, the MPS must be _____.

If capacity utilization by businesses remains constant, investment spending is likely to be the most volatile component of aggregate expenditures in the United States.

At the point where consumption equals disposable income, the average propensity to consume equals 1.

Which of the following is true of long-run consumption functions?

When capacity utilization rate is high:

Which of the following is a stock variable?

When government spending is added to consumption and planned investment, the slope of the aggregate expenditure function increases.

The figure given below represents the consumption function of a country.?Figure 9.3 -Refer to Figure 9.3. We can infer that the marginal propensity to save would be _____.

Other things equal, an increase in the consumer confidence index tends to raise the average propensity to consume.

The aggregate expenditures function:

As disposable income increases, consumption spending will rise, but it will rise by less than disposable income if the MPS is positive.

Keynesian economics developed in response to: