Question 1

The relationship between the real interest rate and investment is shown by the:

Accepted Answer

A)   investment-demand schedule.
B)   consumption of fixed capital schedule.
C)   saving schedule.
D)   aggregate supply curve.E) A) and D)
F) A) and C)

Question 2

If the marginal propensity to consume is 0.9 in a private closed economy,a $20 billion decline in investment spending will decrease:

Accepted Answer

A)   GDP by $20 billion.
B)   GDP by $100 billion.
C)   saving by $20 billion.
D)   consumption by $200 billion.E) A) and D)
F) None of the above

Question 3

If the marginal propensity to save is 0.2 in a private closed economy,a $20 billion rise in investment spending will increase:

Accepted Answer

A)   GDP by $120 billion.
B)   GDP by $20 billion.
C)   saving by $25 billion.
D)   consumption by $80 billion.E) None of the above
F) C) and D)

Question 4

Refer to the data below.The MPS is:

Accepted Answer

A)   7/10.
B)   3/10.
C)   2/5.
D)   3/5.E) None of the above
F) All of the above

Question 5

The slope of the consumption schedule is measured by the MPC.

Accepted Answer

A) True 
 B)False

Question 6

A decline in disposable income:

Accepted Answer

A)   increases consumption by moving upward along a specific consumption schedule.
B)   decreases consumption because it shifts the consumption schedule downward.
C)   decreases consumption by moving downward along a specific consumption schedule.
D)   increases consumption because it shifts the consumption schedule upward.E) B) and C)
F) B) and D)

Question 7

If the consumption schedule shifts upward and the shift was not caused by a tax change,the saving schedule:

Accepted Answer

A)   will not shift.
B)   may shift either upward or downward.
C)   will shift downward.
D)   will also shift upward.E) A) and B)
F) C) and D)

Exam 10: Basic Macroeconomic Relationships

If the consumption schedule shifts upward and the shift was not caused by a tax change,the saving schedule:

Correct Answer
verified

The slope of the consumption schedule is measured by the MPC.

Correct Answer
verified

A decline in disposable income:

Correct Answer
verified

If the marginal propensity to consume is 0.9 in a private closed economy,a $20 billion decline in investment spending will decrease:

Correct Answer
verified

Refer to the data below.The MPS is:

Correct Answer
verified

If the marginal propensity to save is 0.2 in a private closed economy,a $20 billion rise in investment spending will increase:

Correct Answer
verified

The relationship between the real interest rate and investment is shown by the:

Correct Answer
verified

Exam 10: Basic Macroeconomic Relationships

If the consumption schedule shifts upward and the shift was not caused by a tax change,the saving schedule:

Correct AnswerverifiedShow Answer

The slope of the consumption schedule is measured by the MPC.

Correct AnswerverifiedShow Answer

A decline in disposable income:

Correct AnswerverifiedShow Answer

If the marginal propensity to consume is 0.9 in a private closed economy,a $20 billion decline in investment spending will decrease:

Correct AnswerverifiedShow Answer

Refer to the data below.The MPS is:

Correct AnswerverifiedShow Answer

If the marginal propensity to save is 0.2 in a private closed economy,a $20 billion rise in investment spending will increase:

Correct AnswerverifiedShow Answer

The relationship between the real interest rate and investment is shown by the:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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