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Unformatted text preview: If imports are plotted on the vertical axis and disposable income on the horizontal axis, the import line slopes upward with a slope less than 1 The MPC plus the MPS equals 1 Net taxes are taxes minus transfer payments The economy’s investment demand curve shows the inverse relationship between the quantity of investment demanded and the market interest rate, other things held constant.=TRUE The slope of the consumption function equals the marginal propensity to consume.=TRUE At the equilibrium level of real GDP, the MPC equals 1.=TRUE The primary determinant of consumption spending is the price level.= FALSE The larger the MPC, the greater the multiplier effect.=TRUE A decrease in the price level will have which of the following effects? The real value of dollar-denominated assets will rise. If consumer spending increases, other things constant, the aggregate demand curve shifts inward.= FALSE If the level of autonomous spending decreases at a given price level, the aggregate expenditure line shifts downward; the aggregate demand curve shifts to the left What is the effect of an increase in the price level? The real value of dollar-denominated assets will fall. Which of the following is not true at the equilibrium quantity of GDP demanded? planned injections into the circular flow are less than planned leakages out of the flow Suppose that at a particular level of real GDP, the unintended change in inventories is zero. Which of the following is true? That level of real GDP is the equilibrium level of real Suppose that at a particular level of real GDP, the unintended change in inventories is zero....
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This note was uploaded on 10/20/2010 for the course ECON 101 taught by Professor Ohler during the Fall '08 term at Washington State University .
- Fall '08