The sensitivity parameter in the consumption function

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Principles of Economics
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Chapter 31 / Exercise 5
Principles of Economics
Mankiw
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29.The sensitivity parameter in the consumption function that measures how sensitive consumption is to changes in consumer confidence is referred to as the marginal propensity to consume.A) TrueB) False
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Principles of Economics
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Chapter 31 / Exercise 5
Principles of Economics
Mankiw
Expert Verified
Points Earned:1.0/1.0Correct Answer(s):False
30.In a consumption function with income (Y) on the horizontal axis and consumption (C) on the vertical axis, a fall in the real rate of interest (all else constant) will cause a shift upward of the consumption function.
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31.In a consumption function with income (Y) on the horizontal axis and consumption (C) on the vertical axis, a rise in the price level (all else constant) will cause a shift upward of the consumption function.
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32.A fall in tao, the effective tax rate on capital will result in the investment demand function shiftingto the right.
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33.The slope of the investment demand function indicates how sensitive investment is to changes inreal interest rates. The 'flatter' the investment demand function, the less sensitive investment is to changes in the real rate of interest, all else constant.
A) TrueB) FalseCorrect Answer(s):False
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34.A rise in imports, all else constant, will increase net exports.
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35.If the US is growing faster than the rest of the world, then all else constant, the trade deficit will widen (get more negative assuming we were running a trade deficit to begin with).
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36.If the inflation rate rises in China so that it exceeds that of the US, then net exports for the US should increase, all else constant.
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37.
If the exchange rate between the US dollar and Japanese yen changes from $1 = 100 yen to $1 =80 yen, then US exports to Japan will become more expensive to Japanese importers.A) TrueB) FalseCorrect Answer(s):False
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