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Unformatted text preview: 11/02/09. 1. Precisely how do the APC and the MPC differ? Why must the sum of the MPC and the MPS equal 1? What are the basic determinants of the consumption and saving schedules? Of your personal level of consumption? 2. Why is the actual multiplier for the U.S. economy less than the multiplier in this chapters simple examples? 3. What are the basic determinants of investment? Explain the relationship between the real interest rate and the level of investment. Why is investment spending unstable? How is it possible for investment spending to increase even in a period in which the real interest rate rises? 4. What is the central economic idea humorously illustrated in Art Buchwalds piece, Squaring the Economic Circle? How does the central idea relate to recessions, on the one hand, and vigorous expansions, on the other?...
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This note was uploaded on 04/24/2010 for the course ECON 12123 taught by Professor Donald during the Spring '10 term at Johnson County Community College.
- Spring '10