CHAPT_9_y_10[1]

# CHAPT_9_y_10[1] - CHAPTER 9 Basic Macroeconomic Relationships Topic Question numbers 1 2 3 4 5 6 Consumption function/APC/MPC Saving

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CHAPTER 9 Basic Macroeconomic Relationships Topic Question numbers ___________________________________________________________________________________________________ 1. Consumption function/APC/MPC 1-39 2. Saving function/APS/MPS 40-53 3. Shifts in consumption and saving functions 54-69 4 Graphs/tables: mixed consumption and saving 70-106 5. Investment demand 107-145 6. Multiplier effect 146-181 Consider This 182-183 Last Word 184-185 True-False 186-200 ___________________________________________________________________________________________________ Multiple Choice Questions Consumption function/APC/MPC Type: A Topic: 1 E: 152 MA: 152 1. The most important determinant of consumer spending is: A) the level of household debt. C) the stock of wealth. B) consumer expectations. D) the level of income. Answer: D Type: D Topic: 1 E: 152 MA: 152 2. 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. Answer: B/c Type: A Topic: 1 E: 156 MA: 156 3. If Smith's disposable income increases from \$1,200 to \$1,700 and her level of saving increases from minus \$100 to a plus \$100, her marginal propensity to: A) save is three-fifths. C) consume is three-fifths. B) consume is one-half. D) consume is one-sixth. Answer: C Type: A Topic: 1 E: 156 MA: 156 4. With an MPS of .4, the MPC will be: A) 1.0 minus .4. B) .4 minus 1.0. C) the reciprocal of the MPS. D) .4. Answer: A

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Chapter 9: Basic Macroeconomic Relationships Type: D Topic: 1 E: 156 MA: 156 5. The MPC can be defined as that fraction of a: A) change in income that is not spent. C) given total income that is not consumed. B) change in income that is spent. D) given total income that is consumed. Answer: B Type: A Topic: 1 E: 154 MA: 154 6. The 45-degree line on a graph relating consumption and income shows: A) all points where the MPC is constant. B) all points at which saving and income are equal. C) all the points at which consumption and income are equal. D) the amounts households will plan to save at each possible level of income. Answer: C C Type: A Topic: 1 E: 154 MA: 154 7. As disposable income goes up the: A) APC falls. C) volume of consumption declines absolutely. B) APS falls. D) volume of investment diminishes. Answer : A A Type: D Topic: 1 E: 153 MA: 153 8. 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. Answer : D D Type: D Topic: 1 E: 153 MA: 153 9. The consumption schedule relates: A) consumption to the level of disposable income. C) disposable income to domestic income. B)
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## This note was uploaded on 10/29/2011 for the course ECON 210 taught by Professor Lopez during the Spring '11 term at Adrian College.

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CHAPT_9_y_10[1] - CHAPTER 9 Basic Macroeconomic Relationships Topic Question numbers 1 2 3 4 5 6 Consumption function/APC/MPC Saving

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