the economics of money, banking, and financial markets

673 #

© 2014 Pearson Canada Inc.#

9. 
   

   Assume that autonomous consumption equals $200 and disposable income equals $1000. If
   total consumption equal $800, then the mpc equals ____.
   A) 0.2
   B) 0.6
   C) 0.8
   D) 1.0
   Answer: B
   Diff: 2 Type: MC Page Ref: 542
   Skill: Applied
   Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

   
   


10. 
    

    Assume that disposable income equals $1000 and the mpc equals 0.6. If total consumption
    equal $800, then autonomous consumption is equal to ____.
    A) $0
    B) $200
    C) $800
    D) $1000
    Answer: B
    Diff: 2 Type: MC Page Ref: 542
    Skill: Applied
    Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

    
    


11. 
    

    Everything else held constant, if total consumption increases from $600 to $800 because of
    an increase of disposable income of $400, then the mpc is equal to ____.
    A) 0.2
    B) 0. 4
    C) 0.5
    D) 0.6
    Answer: C
    Diff: 2 Type: MC Page Ref: 542
    Skill: Applied
    Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

    
    


12. 
    

    Everything else held constant, if consumption expenditure increases by 65 for a 100 increase
    in disposable income, the mpc is ____.
    A) 0
    B) 0.5
    C) 0.65
    D) 1
    Answer: C
    Diff: 2 Type: MC Page Ref: 542
    Skill: Applied
    Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output