The most important determinant of consumption and saving is the: A. price level. B. interest rate. C. level of income. D. level of bank credit. Question 2If Carol's disposable income increases from $1,200 to $1,700 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to: A. consume is two-fifths. B. consume is three-fifths. C. save is three-fifths. D. consume is one-half. Question 3The 45-degree line on a graph relating consumption and income shows: A. all the points at which saving and income are equal. B. the amounts households will plan to save at each possible level of income. C. all the points at which consumption and income are equal. D. all the points where the MPC is constant Question 4The consumption schedule shows: A. that the MPC increases in proportion to GDP. B. that consumption depends primarily on the level of business investment. C. the amounts households intend to consume at various possible levels of aggregate income. D. that households consume more when interest rates are low. Question 5The APC is calculated as: A. income/consumption. B. change in consumption/change in income. C. change in income/change in consumption. D. consumption/income Question 6The MPC for an economy is: A. 1 divided by the slope of the consumption schedule or line. B. the slope of the consumption schedule or line. C. 1 divided by the slope of the savings schedule or line. D. the slope of the savings schedule or line. Question 7Which one of the following will cause a movement down along an economy's consumption schedule? A. An increase in stock prices. B. An increase in consumer indebtedness. C. A decrease in disposable income. D. A decrease in stock prices. Question 8Dissaving occurs where: A. consumption exceeds income. B. saving exceeds consumption. C. saving exceeds income. D. income exceeds consumption. Question 9At the point where the consumption schedule intersects the 45-degree line: A. the MPC equals 1. B. saving equals income. C. saving is zero. D. the APC is zero. Question 10If the marginal propensity to consume is .9, then the marginal propensity to save must be: A. -0.9 B. 1.1 C. 0.1 D. 1.0 Question 11If the marginal propensity to consume is 0.9, the multiplier is: A. 1 B. 9 C. 10 D. none of these Question 12In the late 1990s, the U.S. stock market boomed, causing U.S. consumption to rise. Economists refer to this outcome as the: A. multiplier effect. B. interest-rate effect. C. wealth effect. D. Keynes effect.

The most important determinant of consumption and saving is the: A. price level. B. interest rate. C. level of income. D. level of bank credit. Question 2 If Carol's disposable income increases...

The most important determinant of consumption and saving is the:

price level.

interest rate.

level of income.

level of bank credit.

Question 2

If Carol's disposable income increases from $1,200 to $1,700 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to:

consume is two-fifths.

consume is three-fifths.

save is three-fifths.

consume is one-half.

Question 3

The 45-degree line on a graph relating consumption and income shows:

all the points at which saving and income are equal.

the amounts households will plan to save at each possible level of income.

all the points at which consumption and income are equal.

all the points where the MPC is constant

Question 4

The consumption schedule shows:

that the MPC increases in proportion to GDP.

that consumption depends primarily on the level of business investment.

the amounts households intend to consume at various possible levels of aggregate income.

that households consume more when interest rates are low.

Question 5

The APC is calculated as:

income/consumption.

change in consumption/change in income.

change in income/change in consumption.

consumption/income

Question 6

The MPC for an economy is:

1 divided by the slope of the consumption schedule or line.

the slope of the consumption schedule or line.

1 divided by the slope of the savings schedule or line.

the slope of the savings schedule or line.

Question 7

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

An increase in stock prices.

An increase in consumer indebtedness.

A decrease in disposable income.

A decrease in stock prices.

Question 8

Dissaving occurs where:

consumption exceeds income.

saving exceeds consumption.

saving exceeds income.

income exceeds consumption.

Question 9

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

the MPC equals 1.

saving equals income.

saving is zero.

the APC is zero.

Question 10

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

	A.	-0.9
	B.	1.1
	C.	0.1
	D.	1.0

Question 11

If the marginal propensity to consume is 0.9, the multiplier is:

	A.	1
	B.	9
	C.	10
	D.	none of these

Question 12

In the late 1990s, the U.S. stock market boomed, causing U.S. consumption to rise. Economists refer to this outcome as the:

multiplier effect.

interest-rate effect.

wealth effect.

Keynes effect.

May 19, 2022

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