Chapter_9_McB

Chapter_9_McB - Name: _ Date: _ 1. The most important...

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Name: __________________________ Date: _____________ 1. The most important determinant of consumption and saving is the: A) level of bank credit. B) level of income. C) interest rate. D) price level. 2. 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. 3. The consumption schedule shows: A) that the MPC increases in proportion to GDP. B) that households consume more when interest rates are low. C) that consumption depends primarily on the level of business investment. D) the amounts households plan or intend to consume at various possible levels of aggregate income. 4. The APC can be defined as the fraction of a: A) change in income that is not spent. B) change in income that is spent. C) specific level of total income that is not consumed. D) specific level of total income that is consumed. Page 1
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5. As disposable income increases, consumption: A) and saving both increase. B) and saving both decrease. C) decreases and saving increases. D) increases and saving decreases. 6. In contrast to investment, consumption is: A) relatively stable. B) relatively unstable. C)
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Chapter_9_McB - Name: _ Date: _ 1. The most important...

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