Which of the following types of government spending is included when calculating GDP? Spending at the federal, state, and municipal levels.
Which of the following events will cause a reduction in equilibrium output? An increase in the marginal propensity to save, an increase in taxes, or a reduction in the marginal propensity to consume (all of the above).
Based on our understanding of the paradox of saving, we know that a reduction in the desire to save will cause: An increase in equilibrium GDP.
Based on our understanding of consumption and saving, we know that the marginal propensity to consume and the marginal propensity to save must: Sum to exactly one.
Suppose there is an increase in autonomous consumption. Specifically, suppose c0 increases where C = c0 + c1YD. This increase in autonomous consumption will cause which of the following to increase? Equilibrium income, equilibrium disposable income, and demand (all of the above).
If C = 2000 + 0.9YD, what increase in government spending must occur for equilibrium output to increase by 1000? 100.
When the economy is in equilibrium, we know with certainty that: None of the above (public saving equals investment, private saving equals investment, G = T).
When a closed economy is in equilibrium, we know with certainty that: I = S + (T - G).
Inventory investment refers to: The difference between production and sales in a given year.
Disposable income equals: The sum of consumption and saving.
The marginal propensity to consume represents: The change in consumption caused by a one-unit change in disposable income.
Let the consumption function be represented by the following equation: C = c0 + c1YD. For this equation, we assume that c1 is: None of the above (negative, larger than c0, different at different levels of income, or equal to one).
Suppose the consumption equation is represented by the following: C = 250 + 0.75YD. Given this information, the marginal propensity to save is: 0.25.
Equilibrium in the goods market requires that: Production equals demand.
An economy is in equilibrium when which of the following conditions is satisfied? Total saving equals investment.
Which of the following is included in G? Government purchases.
Which of the following would tend to make the fiscal multiplier smaller? An increase in the marginal propensity to save.
