Exam 9: The Sticky-Price Income-Expenditure Framework: Consumption and the Multiplier

If the tax rate increases, the marginal propensity to expend will _______ and the value of the multiplier will ________.

If C_y = .75, t = .3, and IM_y = .2, MPE will equal

Each of the following is a possible reason why prices are sticky except

If the marginal propensity to consume is equal to .8, the tax rate is equal to .2, and the marginal propensity to import is .1, the marginal propensity to expend will equal

In the long-run, each of the following is true except

The intercept of the planned expenditure line is

If the tax rate increases,

In the planned total expenditure equation, the autonomous spending group

If the economy is not in equilibrium,

If the government levies a lump-sum tax T_o rather than an income tax, the spending multiplier would be equal to

The level of investment spending is determined by

Each of the following is a possible reason why prices are sticky except

In the expansion or boom phase of the business cycle,

If C_y = .8, t = .2, IM_y = .1, and autonomous spending increases by $1000 billion, the equilibrium level of national income

If the marginal propensity to consume increases,

In the multiplier process, an increase in spending

Each of the following is a possible reason why prices are sticky except

The questions with which Chapter 9 is concerned include each of the following except

The reasons why changing prices or wages may be costly include each of the following except

If the level of income changes by $1 trillion, C₀ = $2 trillion, C_y = .8 and t =.25, the change in level of consumption spending (C) would equal