Exam 12: Consumption, Real GDP, and the Multiplier

Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is

Note: Amounts in billions. -Refer to the above table. If real GDP is $12 billion, total planned expenditures and unplanned inventory changes are respectively

In Keynesian analysis, if investment does NOT change when disposable income increases, the investment is called

-Refer to the above figure. If real Gross Domestic Product (GDP) is $6 trillion, then unplanned business inventories will

-In the above figure, what is autonomous consumption?

Suppose the marginal propensity to consume (MPC) is 0.8 and there is a $2,000 increase in planned investment. Given this information, real GDP will increase by

If the marginal propensity to save (MPS) = 0.3, then

When Monica spends more than her disposable income, Monica is

The investment function would shift outward to the right if

If the multiplier is 20 and income increases by $1000, then saving will increase by

The investment function is represented by

Which of the following statements is FALSE?

The consumption function shows the relationship between planned real consumption spending and

Savings are an example of

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

Note: Amounts in billions. -Refer to the above table. The equilibrium real GDP is

-Refer to the above figure. Line EBD is called

Which of the following statements is TRUE?

In the above figure, saving will equal zero when real disposable income equals

The multiplier effect applies to any