The marginal propensity to consume (MPC) is typically

| June 14, 2018

Question 1The marginal propensity to consume (MPC) is typicallyA.less than zero or greater than 1.0B.equal to zeroC.equal to 1.0D.between -1.0 and 1.0E.between zero and 1.01 points Question 2 What is the difference between actual investment (as defined in GDP) and planned investment? A.Planned investment does not include unplanned inventory changes; actual investment does.B.There is no difference; they are the same.C.Planned investment does not include depreciation; actual investment does.D.Planned investment includes inventories; actual investment does not.E.Planned investment includes depreciation; actual investment does not.1 points Question 3If the marginal propensity to consume is 0.7, the expenditure multiplier isA.7.0B.0.7C.3.0D.3.3E.not determinable without additional information.1 points Question 4The slope of the consumption function is also known asA.the consumption ratioB.the average propensity to consumeC.autonomous consumption spendingD.the marginal propensity to consumeE.multiplying propensity to consume1 points Question 5In the short-run macro model, planned investment is defined asA.plant and equipment purchases by business firms plus inventory changesB.plant and equipment purchases by business firms plus new home constructionC.plant and equipment purchases by business firmsD.new home construction plus inventory changesE.inventory changes1 points Question 6Which of the following solutions to recessions came from the short-run macro model?A.A non-interventionist wait and see solutionB.Increasing taxesC.Decreasing the federal deficit to jump-start the economyD.Increasing government spending to jump-start the economy1 points Question 7Which of the following describes the relationship among income, disposable income, taxes, and transfer payments?A.Taxes plus transfers equal income plus disposable incomeB.Disposable income equals income divided by the sum of taxes and transfersC.Disposable income equals income minus taxes plus transfersD.Disposable income equals income plus taxes plus transfersE.Taxes plus transfers equal disposable income minus income.1 points Question 8Which of the following describes the relationship between the change in inventories and aggregate expenditure?A.Aggregate expenditure equals the change in inventories minus GDP.B.The change in inventories equals GDP divided by aggregate expenditures.C.Aggregate expenditures equals GDP divided by the change in inventories.D.Aggregate expenditures equals GDP minus the change in inventories.E.The change in inventories equals GDP multiplied by aggregate expenditure.1 points Question 9If the expenditure multiplier is 10 and investment spending decreases by $1,000 billion, what will be the change in GDP?A.-$10,000B.$2,500C.$1,000D.$10,000E.-$1,0001 points Question 10If firms increase their investment spending, the resulting change in equilibrium GDP is equal to the change in investment spendingA.multiplied by 2.5B.aloneC.multiplied by the expenditure multiplierD.divided by the marginal propensity to consumeE.plus the change in consumption spending

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