Question 1

An upward shift of the saving schedule suggests:

Accepted Answer

A)  nothing with respect to changes in the APC and APS.
B)  that the APC and APS have both decreased at each GDP level.
C)  that the APC and APS have both increased at each GDP level.
D)  that the APC has decreased and the APS has increased at each GDP level.E) A) and C)
F) A) and B)

Question 2

The saving schedule is drawn on the assumption that as income increases:

Accepted Answer

A)  saving will decline absolutely and as a percentage of income.
B)  saving will increase absolutely, but remain constant as a percentage of income.
C)  saving will increase absolutely, but decline as a percentage of income.
D)  saving will increase absolutely and as a percentage of income.E) C) and D)
F) A) and D)

Question 3

If the MPS is only half as large as the MPC, the multiplier:

Accepted Answer

A)  is 2.
B)  is 3.
C)  is 4.
D)  cannot be determined from the information given.E) B) and D)
F) A) and C)

Question 4

The greater is the marginal propensity to consume:

Accepted Answer

A)  the smaller is the marginal propensity to save.
B)  the higher is the interest rate.
C)  the lower is the average propensity to consume.
D)  the lower is the price level.E) A) and C)
F) B) and C)

Question 5

Suppose an economy's consumption schedule shifts from C1to C2as shown in the diagram below.We can say that its: 1to C2as shown in the diagram below.We can say that its:   A) MPC has increased but its APC at each income level is unchanged. B) APC at each income level is increased but its MPC is unchanged. C) MPC and APC at each income level have both increased. D) MPC and APC at each income level have both decreased." class="answers-bank-image d-inline" rel="preload" >

Accepted Answer

A)  MPC has increased but its APC at each income level is unchanged.
B)  APC at each income level is increased but its MPC is unchanged.
C)  MPC and APC at each income level have both increased.
D)  MPC and APC at each income level have both decreased.E) B) and C)
F) A) and B)

Question 6

The investment demand curve of an economy is:

Accepted Answer

A)  downward sloping.
B)  upward sloping.
C)  horizontal.
D)  vertical.E) None of the above
F) B) and D)

Question 7

Which of the following countries had the lowest gross investment expenditure as a percentage of GDP in 2014, as per Image 10.2 Global Perspective?

Accepted Answer

A)  China
B)  Korea
C)  Canada
D)  United StatesE) B) and C)
F) All of the above

Question 8

The slope of the consumption schedule is measured by the MPC.

Accepted Answer

A) True 
 B)False

Question 9

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) A) and B)
F) A) and C)

Question 10

The average propensity to consume can be defined as income divided by consumption.

Accepted Answer

A) True 
 B)False

Question 11

1 - MPC = MPS.

Accepted Answer

A) True 
 B)False

Question 12

The above figure shows the saving schedules for economies 1, 2, 3, and 4.Which economy has the highest marginal propensity to consume?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) A) and D)
F) None of the above

Question 13

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

Accepted Answer

A)  an increase in household debt outstanding
B)  an increase in disposable income
C)  an increase in stock prices
D)  an increase in interest ratesE) A) and D)
F) A) and C)

Question 14

Refer to the above diagram.The break-even level of disposable income:

Accepted Answer

A)  is zero.
B)  is minus $10.
C)  is $100.
D)  cannot be determined from the information given.E) A) and B)
F) B) and C)

Question 15

Which of the following is a non-income factor affecting consumption?

Accepted Answer

A)  Wealth
B)  Real interest rates
C)  Borrowing
D)  All the answer choices are correct.E) None of the above
F) A) and B)

Question 16

The simple multiplier:

Accepted Answer

A)  occurs only in response to a change in the level of investment spending.
B)  can be found by taking the reciprocal of the MPS.
C)  occurs only when intended investment increases as GDP increases.
D)  is measured by the slope of the saving schedule.E) A) and B)
F) None of the above

Question 17

Refer to the diagram given below. 3. C) only C1, C2, and C3. D) only C4." class="answers-bank-image d-inline" rel="preload" > The diagram given above shows consumption schedules.As income rises, the marginal propensity to consume remains constant for:

Accepted Answer

A)  none of the consumption schedules.
B)  only C3.
C)  only C1, C2, and C3.
D)  only C4.E) B) and D)
F) A) and B)

Question 18

3 only. C) C1, and C2. D) C4 only." class="answers-bank-image d-inline" rel="preload" > Refer to the above diagram.The APC diminishes as income increases for:

Accepted Answer

A)  none of the consumption schedules shown.
B)  C3 only.
C)  C1, and C2.
D)  C4 only.E) A) and C)
F) B) and D)

Question 19

The department of finance estimates that the actual multiplier in Canada ranges from:

Accepted Answer

A)  0.1 to 1.6.
B)  0.4 to 2.1.
C)  0.7 to 3.4.
D)  0.2 to 0.9.E) B) and C)
F) A) and D)

Question 20

If the MPC is .8 and the disposable income is $200, then

Accepted Answer

A)  consumption and saving cannot be determined from the information given.
B)  saving will be $20.
C)  personal consumption expenditures will be $80.
D)  saving will be $40.E) A) and B)
F) A) and C)

Exam 10: B: Basic Macroeconomic Relationships

If the MPS is only half as large as the MPC, the multiplier:

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The department of finance estimates that the actual multiplier in Canada ranges from:

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

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Suppose an economy's consumption schedule shifts from C1to C2as shown in the diagram below.We can say that its:

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1 - MPC = MPS.

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Refer to the above diagram.The break-even level of disposable income:

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The above figure shows the saving schedules for economies 1, 2, 3, and 4.Which economy has the highest marginal propensity to consume?

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Which of the following is a non-income factor affecting consumption?

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An upward shift of the saving schedule suggests:

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The slope of the consumption schedule is measured by the MPC.

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

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Which of the following countries had the lowest gross investment expenditure as a percentage of GDP in 2014, as per Image 10.2 Global Perspective?

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The investment demand curve of an economy is:

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The simple multiplier:

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The average propensity to consume can be defined as income divided by consumption.

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The saving schedule is drawn on the assumption that as income increases:

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If the MPC is .8 and the disposable income is $200, then

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The greater is the marginal propensity to consume:

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Refer to the diagram given below. The diagram given above shows consumption schedules.As income rises, the marginal propensity to consume remains constant for:

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Refer to the above diagram.The APC diminishes as income increases for:

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Suppose an economy's consumption schedule shifts from C₁to C₂as shown in the diagram below.We can say that its:

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