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Ch_9_Set1 - SS141 Macro-Economics Professor Patrick Yanez...

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SS141 Macro-Economics Professor Patrick Yanez Study Questions for Chapter 9 - Set 1 These questions are to facilitate your discussion groups and/or tutoring sessions. Answers are listed at the end of this file. Since our class time is limited to introducing new topics, we do not have time to review these questions in class; please use your discussion group and/or tutoring session to review these questions. 1. The most important determinant of consumer spending is: A) the level of household debt. B) consumer expectations. C) the stock of wealth. D) the level of income. 2. In the aggregate expenditures model, the most important determinant of consumption and saving is the: 3. If Smith's disposable income increases from $1,200 to $1,700 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to: 4. With an MPS of .4, the MPC will be: 5. The MPC can be defined as that fraction of a: A) change in income that is not spent. B) change in income that is spent. C) given total income that is not consumed. D) given total income that is consumed. 6. The 45-degree line on a chart relating consumption and income shows: 7. As disposable income goes up the: 8. The consumption schedule shows: Page 1
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