Question 1

Economists widely agree that the value of the real-world multiplier is 2.5.

Accepted Answer

A) True 
 B)False

Question 2

At the point where the consumption schedule intersects the 45-degree line:

Accepted Answer

A)   the MPC is 1.00.
B)   the APC is 1.00.
C)   saving is equal to consumption.
D)   the economy is in equilibrium.E) A) and D)
F) C) and D)

Question 3

If the real interest rate in the economy is i and the expected rate of return from additional investment is r,then more investment will be forthcoming when:

Accepted Answer

A)   r falls.
B)   i is greater than r.
C)   r is greater than i.
D)   i rises.E) C) and D)
F) A) and B)

Question 4

Dissaving occurs where:

Accepted Answer

A)   income exceeds consumption.
B)   saving exceeds consumption.
C)   consumption exceeds income.
D)   saving exceeds income.E) C) and D)
F) None of the above

Question 5

Which one of the following will cause a movement down along an economy's consumption schedule?

Accepted Answer

A)   An increase in stock prices.
B)   A decrease in stock prices.
C)   An increase in consumer indebtedness.
D)   A decrease in disposable income.E) B) and C)
F) C) and D)

Question 6

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 B)
F) C) and D)

Question 7

If business taxes are reduced and the real interest rate increases:

Accepted Answer

A)   consumption and saving will necessarily increase.
B)   the level of investment spending might either increase or decrease.
C)   the level of investment spending will necessarily increase.
D)   the level of investment spending will necessarily decrease.E) B) and C)
F) A) and D)

Question 8

If the marginal propensity to consume is .9,then the marginal propensity to save must be:

Accepted Answer

A)   1.
B)   .1.
C)   1.1.
D)   .9.E) None of the above
F) B) and C)

Question 9

The greater the MPC,the greater the multiplier.

Accepted Answer

A) True 
 B)False

Question 10

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 D)
F) B) and C)

Exam 29: Basic Macroeconomic Relationships

Economists widely agree that the value of the real-world multiplier is 2.5.

Correct Answer
verified

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

Correct Answer
verified

At the point where the consumption schedule intersects the 45-degree line:

Correct Answer
verified

If business taxes are reduced and the real interest rate increases:

Correct Answer
verified

If the marginal propensity to consume is .9,then the marginal propensity to save must be:

Correct Answer
verified

If the real interest rate in the economy is i and the expected rate of return from additional investment is r,then more investment will be forthcoming when:

Correct Answer
verified

The greater the MPC,the greater the multiplier.

Correct Answer
verified

Dissaving occurs where:

Correct Answer
verified

Which one of the following will cause a movement down along an economy's consumption schedule?

Correct Answer
verified

A decline in disposable income:

Correct Answer
verified

Exam 29: Basic Macroeconomic Relationships

Economists widely agree that the value of the real-world multiplier is 2.5.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

At the point where the consumption schedule intersects the 45-degree line:

Correct AnswerverifiedShow Answer

If business taxes are reduced and the real interest rate increases:

Correct AnswerverifiedShow Answer

If the marginal propensity to consume is .9,then the marginal propensity to save must be:

Correct AnswerverifiedShow Answer

If the real interest rate in the economy is i and the expected rate of return from additional investment is r,then more investment will be forthcoming when:

Correct AnswerverifiedShow Answer

The greater the MPC,the greater the multiplier.

Correct AnswerverifiedShow Answer

Dissaving occurs where:

Correct AnswerverifiedShow Answer

Which one of the following will cause a movement down along an economy's consumption schedule?

Correct AnswerverifiedShow Answer

A decline in disposable income:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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