FinalReview - REVIEW QUESTIONS FOR FINAL EXAM 1 In Keynesian theory at the price-output combination that defines macro equilibrium A The economy may or

FinalReview - REVIEW QUESTIONS FOR FINAL EXAM 1 In...

This preview shows page 1 - 3 out of 13 pages.

REVIEW QUESTIONS FOR FINAL EXAM 1.In Keynesian theory, at the price-output combination that defines macro equilibrium: A)The economy may or may not be at full employment. B)The aggregate demand curve intersects the aggregate supply curve. C)Producers have no incentive to change the rate of output because they are selling everythingthey produce. D)All of the above are correct. 2.Which of the following is a Keynesian conclusion about how adjustments occur in a recessionary gap? 3.Consumption is defined as expenditures by: 4.Disposable income is defined as: 5.Disposable income is calculated as: A)Consumption + saving + social security payments. B)Consumption + saving. C)Consumption + saving + taxes. D)Consumption - saving. 6.Suppose the MPC in an economy is 0.8, the APC is 0.9 and disposable income is $10 billion. If disposable income increases to $14 billion, what is the new level of consumption? 7.The marginal propensity to consume is: 8.Autonomous consumption is: 9.Given a consumption function of C=25 + 0.75Y, the average propensity to consume is 1 when income equals: A)$25. B) $75. C) $100. D) -$300.
10.The consumption function is:

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture