Chapter_3

Chapter_3 - Macroeconomics Test Yourself Chapter3 1. For...

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Test Yourself Chapter3 1. For the U.S. economy, the largest component of GDP is a. consumption. b. investment. c. government spending. d. exports. e. imports. 2. "Government spending" in GDP consists of spending by a. the federal government only. b. state and local governments only. c. the federal and state governments only. d. all levels of government: federal, state, and local. e. the federal government, plus state and local spending only if it is paid for with federal government funds. 3. Which of the following is an exogenous variable in our model of the goods market? a. consumption (C) b. saving (S) c. disposable income (Y D ) d. government spending (G) e. all of the above. 4. Which of the following is an endogenous variable in our model of the goods market? a. consumption (C) b. disposable income (Y D ) c. saving (S) d. income e. all of the above. 5. The marginal propensity to consume is a. the value of consumption spending if income were zero. b. total consumption spending divided by total disposable income. c. total income minus total taxes. d. the increase in disposable income caused by a one-unit decrease in taxes. e. the increase in consumption caused by a one-unit increase in disposable income. 6. In the consumption equation C = c + c ¯ Y D , we assume that c ¯ is a. negative. b. larger than c . c. different at different levels of income. d. larger than one.
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This note was uploaded on 08/03/2008 for the course BUAD 350 taught by Professor Safarzadeh during the Summer '07 term at USC.

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Chapter_3 - Macroeconomics Test Yourself Chapter3 1. For...

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