Exam 9: Consumption, investment, and the Multiplier

An increase in the price level causes

Suppose investment spending is $5 billion,real disposable income is $200 billion,and the marginal propensity to consume is 0.8.If real disposable income increases to $220 billion,investment spending will be

If the marginal propensity to consume is 0.8,the multiplier will be

Suppose the equilibrium level for an economy occurs when C + I + G + X - M = $600.If the real national income is $500,then unplanned inventories are

In a closed economy,the equilibrium national income occurs where

The ratio of the change in consumption to the change in disposable income is the

The larger the MPC,

Where the consumption function crosses the 45-degree line,

The consumption function will shift upward when

Figure 9-3 -According to Figure 9-3,at an income level of Y₁

If the multiplier in the economy is 3,the marginal propensity to save must be

Figure 9-4 -In Figure 9-4,at an income level of Y₁ and planned expenditures of (C + I)1,the level of autonomous investment is

According to Keynes,an individual's level of saving is primarily determined by

Figure 9-2 -In Figure 9-2,when real disposable income is less than 600,then

If business executives become more optimistic about the future,we would expect that

An increase in the interest rate will cause

If autonomous consumption expenditures increase,then

The marginal propensity to consume is found by

The multiplier is the ratio of the

Figure 9-4 -At an income level of Y₃ and planned expenditures of (C + I)1 in Figure 9-4,