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Chapter 8 hw3

# Principles of Macroeconomics: A Study Guide

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Chapter 8: Aggregate Expenditure and Equilibrium Output Multiple Choice

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1. A simple Keynesian study of the economy assumes that: Aggregate output and aggregate income are the same. Aggregate output and aggregate quantity supplied are the same. Aggregate output refers to quantities of goods and services produced, not the dollars circulating in the economy. Economic activity is divided into single periods in which output is produced, income is generated, and spending takes place. All of the above. 2. Refer to the graph below. When the consumption function is above the 45° line:
Consumption exceeds income and saving is negative. Consumption is less than income and saving is negative. Consumption exceeds income and saving is positive. Consumption is less than income and saving is negative. 3. Refer to the graph below. What is the value of the marginal propensity to consume ( MPC ) ? 1,000 1.25 0.2 0.8 There is not sufficient information to estimate the value of the marginal propensity to consume. 4.

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Refer to the graph below. At what level of disposable income is consumption equal to disposable income? \$1,250 \$5,000 \$1,000 \$800 \$4,200 5. Refer to the graph below. What is the level of saving when Y d = \$1,000?
\$1,800 \$1,200 - \$200 - \$800 - \$1,200 6.

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Chapter 8 hw3 - Chapter 8 Aggregate Expenditure and...

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