Exam 23: The Aggregate Expenditure Model

Bill's disposable income goes from $100,000 in 2010 to $200,000 in 2011,and his consumption spending goes from $80,000 in 2010 to $140,000 in 2011.Which of the following statements about Bill is true?

When all the factors of aggregate expenditure are influenced by income,the multiplier becomes a function of the:

When a person's consumption goes from $8,000 to $12,000 when her disposable income goes from $10,000 to $20,000,her MPC equals:

The expenditure multiplier applies only to changes in government spending.

A given change in disposable income would have the smallest effect on consumption with which of the following marginal propensities to consume?

The marginal propensity to consume is a measure of the additional consumption that results from a one-dollar increase in disposable income.

A change in aggregate expenditures for reasons other than the price level will shift the aggregate demand curve.

Assume that autonomous expenditures in an economy decreased by $10 billion.What is the change in aggregate demand at a given price level if the MPC is 0.5?

If government spending increased by $100 billion and the MPS within the economy was 0.25,what would be the total impact on real GDP?