Because inflation was not a serious problem during

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13) Because inflation was not a serious problem during the Great Depression, Keynes’s analysis assumed (a) that inflation was not a problem. (b) that the money supply was fixed. (c) that the price level was fixed. (d) all of the above. Answer: C Question Status: Previous Edition 14) Keynes assumed that the price level was fixed because 15) Keynes reasoned that consumer expenditure is most closely related to 16) Keynes reasoned that consumer expenditure is related to 17) In the Keynesian model of income determination, consumer expenditure includes spending by (a) consumers on personal computers. (b) businesses on personal computers. (c) governments on personal computers. (d) all of the above since computers are consumer durables. Answer: A Question Status: Previous Edition
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826 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 18) In the Keynesian model of income determination, consumer expenditure includes spending by consumers on 19) The marginal propensity to consume (mpc) can be defined as the fraction of 20) If the consumption function is expressed as C = a + mpc × Y D , then “mpc” represents 21) If the consumption function is expressed as C = a + mpc × Y D , then “a” represents (a) autonomous consumer expenditure. (b) the marginal propensity to consume. (c) the expenditure multiplier. (d) disposable income. Answer: A Question Status: Previous Edition
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