Ch.9 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. The most important determinant of consumer spending is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  2. The 45-degree line on a chart relating consumption and income shows:   (4 points)

    a.  
    b.  
    c.  
    d.  

  3. As disposable income goes up the:   (4 points)

    a.  
    b.  
    c.  
    d.  

  4. In the aggregate expenditures model, the size of the MPC is assumed to be:   (4 points)

    a.  
    b.  
    c.  
    d.  

  5. As disposable income increases, consumption:   (4 points)

    a.  
    b.  
    c.  
    d.  

  6. The relationship between consumption and disposable income is such that:   (4 points)

    a.  
    b.  
    c.  
    d.  

  7. (Advanced analysis) Answer the next question(s) on the basis of the following consumption schedule: C = 20 + .9Y , where C is consumption and Y is disposable income.

    Refer to the above data. The MPC is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  8. Given the consumption schedule, it is possible to graph the relevant saving schedule by:   (4 points)

    a.  
    b.  
    c.  
    d.  

  9. Assume the economy's consumption and saving schedules simultaneously shift downward. This must be the result of:   (4 points)

    a.  
    b.  
    c.  
    d.  



  10. Refer to the above diagram. At income level F the volume of saving is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  11. Answer the next question(s) on the basis of the following data for a hypothetical economy.



    Refer to the above data. At the $100 level of income, the average propensity to save is:   (4 points)

    a.  
    b.  
    c.  
    d.  





  12. The saving schedule shown in the above diagram would shift downward if, all else equal:   (4 points)

    a.  
    b.  
    c.  
    d.  



  13. Refer to the above diagram. The break-even level of disposable income:   (4 points)

    a.  
    b.  
    c.  
    d.  



  14. Refer to the above diagram. The break-even level of GDP (= income) is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  15. (Advanced analysis) Answer the next question(s) on the basis of the following data:



    Which of the following equations correctly represents the above data?   (4 points)

    a.  
    b.  
    c.  
    d.  

  16. Given the expected rate of return on all possible investment opportunities in the economy:   (4 points)

    a.  
    b.  
    c.  
    d.  

  17. The investment-demand curve will shift to the right as the result of:   (4 points)

    a.  
    b.  
    c.  
    d.  

  18. Answer the next question(s) on the basis of the following data for a private closed economy.



    Refer to the above data. The MPS is:   (4 points)

    a.  
    b.  
    c.  
    d.  



  19. Refer to the above diagram for a private closed economy. At the equilibrium level of GDP the APC and APS:   (4 points)

    a.  
    b.  
    c.  
    d.  

  20. (Advanced analysis) Answer the next question(s) on the basis of the following information for a private closed economy, where Ig is gross investment, S is saving, and Y is gross domestic product (GDP).
    _
    Ig = Ig = 80
    S = -80 + .4Y


    Refer to the above information. The equilibrium GDP will be:   (4 points)

    a.  
    b.  
    c.  
    d.  

  21. In a private closed economy _____ investment is equal to saving at all levels of GDP and equilibrium occurs only at that level of GDP where _____ investment is equal to saving.   (4 points)

    a.  
    b.  
    c.  
    d.  

  22. At the $180 billion equilibrium level of income, saving is $38 billion in a private closed economy. Planned investment must be:   (4 points)

    a.  
    b.  
    c.  
    d.  

  23. (Last Word) Classical macroeconomics was dealt severe blows by:   (4 points)

    a.  
    b.  
    c.  
    d.  

  24. (Last Word) In The General Theory of Employment, Interest, and Money:   (4 points)

    a.  
    b.  
    c.  
    d.  

  25. The average propensity to consume is defined as income divided by consumption.   (4 points)

    a.  
    b.  



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