Exam 12: Fiscal Policy

The following table shows a hypothetical relationship between consumption and income.Answer the indicated question(s)on the basis of this table. Table 12.1-Income and consumption data -Based on Table 12.1,what is the marginal propensity to save?

Ceteris paribus,_______ in consumer confidence will cause _______ in aggregate demand.

The fraction of each additional dollar of disposable income not spent on consumption is referred to as:

If excessive aggregate demand causes prices to rise,which of the following would be a correct fiscal-policy action?

Which of the following is the correct formula for the marginal propensity to consume?

Which of the following is true about Keynes?

Between 1921 and 1927,the stock market's value more than doubled,adding billions of dollars to the wealth of U.S.households and businesses.Which of the following indicates the appropriate change in the U.S.economy?

The four components of aggregate demand are:

The purpose of fiscal stimulus is to shift aggregate:

Which of the following is not an example of investment spending?

For consumers,every dollar of income is either consumed or saved.

Which of the following is the largest component of aggregate demand for the U.S.economy?

The after-tax income of consumers is defined as:

A tax hike will increase the level of aggregate demand since the government will have more money to spend.

During the Great Depression,the primary reason why unemployment was so high was because unemployed workers were unskilled.

Fiscal restraint:

If the multiplier is 2.5 and defense expenditures decrease by $10 million,aggregate demand decreases by a total of:

Exports minus imports are referred to as:

If consumers save $0.09 out of each additional dollar of disposable income,the marginal propensity to consume is 0.91.

Which of the following is not a component of aggregate demand?