Exam 12: Consumption, Real GDP, and the Multiplier

Consumption goods

Suppose when real disposable income is $5000, planned real consumption is $4000. When real disposable income increases to $6000, planned real saving increases by $500. The new planned real consumption expenditures is

The part of consumption that does NOT depend upon the level of disposable income is

If your real disposable income goes up by $200 per week, and your real consumption spending goes up by $160 per week, you have an marginal propensity to save of

Consumption goods are

According to Keynes, real saving and real consumption spending are functions of

The marginal propensity to save (MPS) is

-Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. The break-even level of real disposable income is

-Refer to the above figure. Point B

Average propensity to consume

Autonomous consumption is the level of consumption that is

Autonomous consumption

The difference between a stock and a flow is

According to Keynes, the primary determinant of a person's saving is NOT

Investment is

Suppose that when disposable income increases by $2,000, consumption spending increases by $1,500. Given this information, we know that the marginal propensity to consume (MPC) is

In the Keynesian model, whenever planned investment is greater than planned saving

Autonomous consumption is defined as

In the Keynesian model, a decrease in real autonomous spending results in a more than proportional decrease in real Gross Domestic Product (GDP) because

-Refer to the above figure. If real disposable income is $30,000, saving is