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PRINCIPLES OF MACROECONOMICS   QUIZ #3 – COVERING CHAPTERS 8 and 9 DUE BACK ON MARCH 24, 2010   INSTRUCTIONS:   Please answer each question to your best ability. Each question requires a short  answer. Please answer on a separate sheet of paper.  When you hand in your quizzes to me, I will hand you  the answer sheet. You will receive credit for this quiz if I see that a reasonable attempt was made at  EACH  question.    1. What is the relationship between consumption and the following economic variables: household income, wealth, household's expectations about the future, and interest rates? 2. Draw a graph of the consumption function and explain what the vertical intercept means and the slope. Make sure to label both axes. 3. Explain any differences between actual investment and planned investment. Also, is it possible for actual investment to be greater than planned investment? If so, explain. 4.
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This note was uploaded on 02/24/2011 for the course ECON 2301 taught by Professor Mcelroy during the Spring '09 term at University of Texas at Dallas, Richardson.

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