Use the consumption function shown to answer the following questions. At what level of income is consumption equal to disposable income? $ billion. 110 100- C-Y Which of the following statements is true? 90 OA Consumpfion is $30 billion when the income level is $100 bilion. OB. Saving equals consumption at an income level of $40 billion OC. At an income level of $0 billion there is dissaving equal to $20 billion. OD. At an income of $100 billion there is dissaving of $30 billion. 80- 70 60 50- 40 30 204 10 10 20 30 Real Disposable Income ($ billions) 40 s0 60 70 o 90 10o 110 Planned Real Consumption

Use the consumption function shown to answer the following questions. At what level of income is consumption equal to disposable income? $ billion. 110 100- C-Y Which of the following statements is true? 90 OA Consumpfion is $30 billion when the income level is $100 bilion. OB. Saving equals consumption at an income level of $40 billion OC. At an income level of $0 billion there is dissaving equal to $20 billion. OD. At an income of $100 billion there is dissaving of $30 billion. 80- 70 60 50- 40 30 204 10 10 20 30 Real Disposable Income ($ billions) 40 s0 60 70 o 90 10o 110 Planned Real Consumption

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 1.3P

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100 gaia 270 200 130 60 450 100 200 300 Aggregate income (Y) Figure 8.3 ?Refer to Figure 8.3. Which of the following statements is true „Aggregate saving is negative for all income levels below $400 a O For all aggregate income levels above $200, aggregate consumption is greater than aggregate income b O If consumption is the only expenditure, this economy would be in equilibrium at an aggregate income level of c O $300 Saving is negative at all income levels below $200 d O Aggregate consumption (C)
On a graph of a consumption function, what is the significance of the 45-degree line? O a. It connects all points where desired consumption equals actual disposable income. O b. It connects all points where desired consumption equals desired expenditure. O c. Desired consumption is zero at all points along the 45-degree line. O d. It connects all points where desired consumption equals desired saving. O e. It shows the slope of the average consumption function, against which we measure other consumpfion functions
Disposable Income Consumption $0 $400 500 800 1,000 1,200 1,500 1,600 2,000 2,000 2,500 2,400 3,000 2,800 Refer to Exhibit 10-8. When disposable income equals $1,500, saving equals O a. -$100. O b. S1,600. O C $1,800. O d. S100.
ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is C=40+ 0.9 Y. Also suppose that income (Y) is $400. Determine the following values: Instructions: For parts a, b, d, and f, round your answers to 2 decimal places if necessary. For parts c and e, enter your answers as a whole number. a. MPC = .9 b. MPS = .1 c. Level of consumption = $ 400 d. APC = e. Level of saving = $ f. APS 이 0
An increase in disposable income shifts Select one: a. both the consumption and savings functions downward. b. the consumption function upward and leads to a movement along the savings function. O c. neither the consumption function or the savings function because it leads to a movement along both the consumption and savings function. d. both the consumption and savings functions upward.
ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is C=60 + 0.75Y Also suppose that income (Y is $600. Determine the following values: Instructions: For parts a, b, d, and f, round your answers to 2 decimal places if necessary. For parts c and e, enter your answers as a whole number. a. MPC = b. MPS = c. Level of consumption = $ d. APC= e. Level of saving = $ %3D f. APS %3D
Refer to the above table. Suppose investment is $12 billion and the economy revises its saving plans so as to save $4 billion more at all levels of income. The new equilibrium GDP will be: Domestic Output or Income (GDP = DI) $240 250 260 270 280 290 300 310 320 a. $270 billion b. $280 billion $260 billion $290 billion O c. O d. Clear my choice Consumption $244 250 256 262 268 274 280 286 292
Which one of the following statements about consumption spending is incorrect? A. Spending on non-durable goods such as food is the most stable component of consumption spending. B. Spending on durable goods is the most erratic or volatile component of consumption spending. O C. Consumption spending is determined largely by total income in the economy. O D. Part of consumption spending consists of spending on services. E. There is a strong inverse relationship between consumption spending and total income in the economy
If there is a shortage of loanable funds, then 1) the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is above equilibrium. 21 the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is below equilibrium. O 3) the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is above equilibrium. 4) the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is below equilibrium.
A country reports that unplanned inventories increased during 2019. The increase in unplanned inventories leads to O a. the government decreasing production, which decreases GDP. O b. consumers increasing their consumption expenditure, which increases GDP. firms decreasing production, which decreases GDP. O d. actual aggregate expenditure being different than real GDP. e. firms increasing production, which increases GDP.
1. The positive relationship between consumption expenditure and disposable income can be shown by a positive slope of consumption curve. Answer: Reason: O Accessibility: Investigate hp
If Michelle's income is reduced to zero after she loses her job, her consumption will be and her saving will be O greater than zero; greater than zero O less than zero; greater than zero O greater than zero; less than zero O less than zero; less than zero