Homework Answers
In classical economic theory, autonomous variable are those variables which are exogenous and takes a value when income level is zero
Current disposable income depends on income level. It is calculated as difference between income earned and tax paid by the consumer.
Tastes & preferences, interest rate and real wealth has values even when income level is zero.
Thus, the correct answer is a. current disposable income
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QUESTION 18 Which of the following is not an autonomous determinant of consumption expenditures? a. current...
3. According to Keynes, the main determinant of the consumption level is a) current income. b)...
3. According to Keynes, the main determinant of the consumption level is a) current income. b) initial wealth C) permanent income. d) the rate of interest. 4. Transitory income is a) average annual income over one's lifetime. b) the difference between actual income and permanent income c) income generated by the assets. d) the sum of labour income and the returns on assets.
QUESTION 12 If the MPC is 0.75, then the multiplier is: QUESTION 13 and autonomous consumption If the consumption f...
QUESTION 12 If the MPC is 0.75, then the multiplier is: QUESTION 13 and autonomous consumption If the consumption function is: C -0.68(Disposable income) + 400, the MPC -
QUESTION 13 and autonomous If the consumption function is: C = 0.68(Disposable Income) + 400, the MPC- consumption...
QUESTION 13 and autonomous If the consumption function is: C = 0.68(Disposable Income) + 400, the MPC- consumption -
ents is true concerning the consumption function et e n between ale Ince ction lies above...
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
7 and 8 QUESTION 7 Planned Consumption 40 10 20 Real Disposable Income/Yoar Refer to the...
7 and 8
QUESTION 7 Planned Consumption 40 10 20 Real Disposable Income/Yoar Refer to the above figure. Autonomous consumption equals $5000. 0. -$5000 $25,000 QUESTION 8 According to Keynes consumption is directly related to income but saving has no relationship with income. consumption is directly related to income but saving is inversely related to income. both consumption and saving are positively related to real disposable income. e consumption is positively related to the interest rate.
QUESTION 10 Which of the following is not a determinant of the demand for a particular...
QUESTION 10 Which of the following is not a determinant of the demand for a particular good? O a. The prices of the inputs used to produce the good O b. Income c. Tastes d. The prices of related goods
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice Ident the choice thar best completes the statement or answer the question 1. Classical economie theory predicted that in the long run the economy would experience: a. below full unemployment. b. rising rate of inflation. c. full employment. d idle factors of production. 2. According to Keynes, what is the most important determinant of households spending on goods and services? a. The price level....
Suppose the marginal propensity to consume if 0.75 and autonomous consumption (consumption at zero income) is...
Suppose the marginal propensity to consume if 0.75 and autonomous consumption (consumption at zero income) is $4,000. If income is $50,000, consumption spending is a. $37,500 b. $41,500 C. $45,500 d. $54,000 QUESTION 4 If the consumption function for an economy is C = 180 + 75 Yd (disposable income) and spending increases by $800, then the resulting change in national income is a. +$2,800 OOO b. 5-3,200 c. $-2,800 d. $+3,200 QUESTION 5 Assume the actual GDP is $4800...
Suppose that due to the Covid pandemic, autonomous consumption spending falls. Which of the following events...
Suppose that due to the Covid pandemic, autonomous consumption spending falls. Which of the following events are likely to follow. Check off ALL that are applicable. The aggreggate expenditure curve will shift upwards U unplanned inventory investment will rise disposable incomes will fall the aggregate price level will rise the AD curve will shift to the left the MD curve will shift to the right which will lower the interest rate
3. According to Keynes, the main determinant of the consumption level is a) current income. b) initial wealth C) permanent income. d) the rate of interest. 4. Transitory income is a) average annual income over one's lifetime. b) the difference between actual income and permanent income c) income generated by the assets. d) the sum of labour income and the returns on assets.
QUESTION 12 If the MPC is 0.75, then the multiplier is: QUESTION 13 and autonomous consumption If the consumption function is: C -0.68(Disposable income) + 400, the MPC -
QUESTION 13 and autonomous If the consumption function is: C = 0.68(Disposable Income) + 400, the MPC- consumption -
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
7 and 8
QUESTION 7 Planned Consumption 40 10 20 Real Disposable Income/Yoar Refer to the above figure. Autonomous consumption equals $5000. 0. -$5000 $25,000 QUESTION 8 According to Keynes consumption is directly related to income but saving has no relationship with income. consumption is directly related to income but saving is inversely related to income. both consumption and saving are positively related to real disposable income. e consumption is positively related to the interest rate.
QUESTION 10 Which of the following is not a determinant of the demand for a particular good? O a. The prices of the inputs used to produce the good O b. Income c. Tastes d. The prices of related goods
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice Ident the choice thar best completes the statement or answer the question 1. Classical economie theory predicted that in the long run the economy would experience: a. below full unemployment. b. rising rate of inflation. c. full employment. d idle factors of production. 2. According to Keynes, what is the most important determinant of households spending on goods and services? a. The price level....
Suppose the marginal propensity to consume if 0.75 and autonomous consumption (consumption at zero income) is $4,000. If income is $50,000, consumption spending is a. $37,500 b. $41,500 C. $45,500 d. $54,000 QUESTION 4 If the consumption function for an economy is C = 180 + 75 Yd (disposable income) and spending increases by $800, then the resulting change in national income is a. +$2,800 OOO b. 5-3,200 c. $-2,800 d. $+3,200 QUESTION 5 Assume the actual GDP is $4800...
Suppose that due to the Covid pandemic, autonomous consumption spending falls. Which of the following events are likely to follow. Check off ALL that are applicable. The aggreggate expenditure curve will shift upwards U unplanned inventory investment will rise disposable incomes will fall the aggregate price level will rise the AD curve will shift to the left the MD curve will shift to the right which will lower the interest rate
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