Question 1

The Keynesian-cross model suggests that increased saving increases the economy's output.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following will result as part of the interest rate effect when the price level rises?

Accepted Answer

A) ​Households and firms increase their holdings of money. 
B) ​Interest rates will increase. 
C) ​A lower quantity of real GDP will be demanded. 
D) ​All of the above will result as part of the interest rate effect when the price level rises. 
A) ​Households and firms increase their holdings of money. 
B) ​Interest rates will increase. 
C) ​A lower quantity of real GDP will be demanded. 
D) ​All of the above will result as part of the interest rate effect when the price level rises.

Question 3

Marginal propensity to consume is equal to the change in ____ divided by the change in ____.

Accepted Answer

A) ​consumption spending; total income 
B) ​saving; total income 
C) ​saving; disposable income 
D) ​consumption spending; disposable income 
A) ​consumption spending; total income 
B) ​saving; total income 
C) ​saving; disposable income 
D) ​consumption spending; disposable income

Question 4

If Pat's income increased from $250,000 to $500,000 and his consumption increased from $200,000 to $300,000, what was his marginal propensity to consume?

Accepted Answer

A) ​0.4 
B) ​0.6 
C) ​0.8 
D) ​0.9 
A) ​0.4 
B) ​0.6 
C) ​0.8 
D) ​0.9

Question 5

Autonomous determinants of consumption expenditures are dependent on the level of current disposable income.

Accepted Answer

A) True 
 B)False

Question 6

The marginal propensity to consume plus the marginal propensity to save must always equal 1.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following changes in taxes would lead to the smallest increase in consumption?

Accepted Answer

A) ​a $20,000 decrease in taxes, if MPC equals 0.5 
B) ​a $12,000 decrease in taxes, if MPC equals 0.75 
C) ​a $15,000 decrease in taxes, if MPC equals 0.6 
D) ​a $30,000 decrease in taxes, if MPC equals 0.25 
A) ​a $20,000 decrease in taxes, if MPC equals 0.5 
B) ​a $12,000 decrease in taxes, if MPC equals 0.75 
C) ​a $15,000 decrease in taxes, if MPC equals 0.6 
D) ​a $30,000 decrease in taxes, if MPC equals 0.25

Question 8

If George's MPS is 0.75 and he earns an additional $1,000, how much would he spend?

Accepted Answer

A) ​$250 
B) ​$750 
C) ​$1,333 
D) ​$4,000 
A) ​$250 
B) ​$750 
C) ​$1,333 
D) ​$4,000

The Keynesian-cross model suggests that increased saving increases the economy's output.

Which of the following will result as part of the interest rate effect when the price level rises?

Marginal propensity to consume is equal to the change in divided by the change in .

If Pat's income increased from $250,000 to $500,000 and his consumption increased from $200,000 to $300,000, what was his marginal propensity to consume?

Autonomous determinants of consumption expenditures are dependent on the level of current disposable income.

The marginal propensity to consume plus the marginal propensity to save must always equal 1.

Which of the following changes in taxes would lead to the smallest increase in consumption?

If George's MPS is 0.75 and he earns an additional $1,000, how much would he spend?

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exam 15: Oligopoly and Strategic Behavior

The Keynesian-cross model suggests that increased saving increases the economy's output.

Which of the following will result as part of the interest rate effect when the price level rises?

Marginal propensity to consume is equal to the change in ____ divided by the change in ____.

If Pat's income increased from $250,000 to $500,000 and his consumption increased from $200,000 to $300,000, what was his marginal propensity to consume?

Autonomous determinants of consumption expenditures are dependent on the level of current disposable income.

The marginal propensity to consume plus the marginal propensity to save must always equal 1.

Which of the following changes in taxes would lead to the smallest increase in consumption?

If George's MPS is 0.75 and he earns an additional $1,000, how much would he spend?

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Marginal propensity to consume is equal to the change in divided by the change in .