Exam 11: Consumption, Real GDP, and the Multiplier

-In the above figure, point E represents the level of real GDP at which planned saving equals planned investment. At point A

Which of the following is NOT included in the flow of investment spending that is part of total planned expenditures in the economy?

Total planned expenditures in a closed economy are equal to

The investment function intersects the saving schedule at an interest rate of 8 percent and a level of investment of $1.2 trillion a year. If the consumption curve intersects the 45-degree reference line at $3 trillion, then

-According to the above table, as the level of real disposable income increases

-According to the above table, if real Gross Domestic Product (GDP)equals $30,000, what is the average propensity to consume?

A decrease in interest rates will

What happens as interest rates fall?

The break-even point on the consumption function represents the point where

If the marginal propensity to consume (MPC)is 0.8, the spending multiplier will be

The multiplier effect tends to

Note: Amounts in billions. -Refer to the above table. Which variables in the table are NOT autonomous?

One of the primary determinants of planned real investment spending is the

The average propensity to consume is

Which of the following is negative for the "typical" consumer at some level of real disposable income?

At the break-even point for the consumption function

The multiplier effect applies to any

All of the following will cause an outward shift of the investment function EXCEPT

In the graph for the consumption function, the 45-degree line

A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS)equals 0.25 will lead to a decrease in real Gross Domestic Product (GDP)of