Chapter_11_Review_Questions

Chapter_11_Review_Questions - 1) Consumption spending is $5...

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1) Consumption spending is $5 million, planned investment spending is $8 million, unplanned investment spending is $2 million, government purchases are $10 million, and net export spending is $2 million. What is GDP? 1) A) $15 million B) $27 million C) $25 million D) $23 million 2) A decrease in consumer confidence can put your job at risk if 2) A) aggregate expenditures fall. B) aggregate expenditures rise. C) consumers expect their incomes to rise in the future. D) consumers expect firms to increase investment in the future. Table 11 - 2 Consumption (Dollars) Disposable Income (Dollars) $600 $1,000 900 1,500 1,200 2,000 3) Refer to Table 11 - 2. Given the consumption schedule in the table above, the marginal propensity to save is 3) A) 0.4. B) 0.5. C) 0.6. D) 0.3. 1
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4) During a(n) ________ many firms experience reduced profits, which reduces ________ and investment spending. 4) A) recession; cash flow B) recession; government spending C) expansion; cash flow D) expansion; business confidence
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Chapter_11_Review_Questions - 1) Consumption spending is $5...

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