Chapter 10 – Basic Macroeconomic Relationships
1. Personal saving is equal to:
2. The amount of consumption in an economy correlates:
Chapter 10 – Basic Macroeconomic Relationships
3. The consumption schedule shows the relationship of household consumption to the level
of:
4. When a consumption schedule is plotted as a straight line, the slope of the consumption line
is:
5. When the consumption schedule is plotted on a graph:
Chapter 10 – Basic Macroeconomic Relationships
6. As disposable income decreases, consumption:
7. Refer to the consumption schedule above. At income level 3, the amount of saving is
represented by the line segment:
Chapter 10 – Basic Macroeconomic Relationships
8. Refer to the consumption schedule above. At income level 3, the amount of consumption is
represented by the line segment:
9. Refer to the consumption schedule above. At income level 1, the amount of saving is:
10. Refer to the consumption schedule above. Disposable income equals consumption at
point:
Chapter 10 – Basic Macroeconomic Relationships
11. Refer to the consumption schedule above. The break-even level of income would be at
income level:
12. Refer to the consumption schedule above. As income rises from level 1 to level 2, the
amount of:
13. Refer to the consumption schedule above. As income falls from level 3 to level 2, the
amount of:
Chapter 10 – Basic Macroeconomic Relationships
14. An increase in disposable income:
15. The slope of the consumption schedule between two points on the schedule is:
16. The fraction, or percentage, of total income which is consumed is called the:
Chapter 10 – Basic Macroeconomic Relationships
17. As disposable income decreases, the:
18. If consumption increases while income remains the same, the average propensity to
consume will:
19. If there is a decrease in disposable income in an economy, then:
Chapter 10 – Basic Macroeconomic Relationships
20. If disposable income is $900 billion when the average propensity to consume is 0.9, it can
be concluded that:
21. The MPC can be defined as the:
22. If a family’s MPC is .7, it means that the family is:
Chapter 10 – Basic Macroeconomic Relationships
23. If you know that an increase in a household’s disposable income from $35,000 to $45,000
leads to an increase in consumption from $30,000 to $38,000, then you can conclude that the:
24. Assume that an increase in a household’s disposable income from $40,000 to $48,000
leads to an increase in consumption from $35,000 to $41,000, then the:
25. If Sara Thomas’ disposable income increases from $4,000 to $4,500 and her level of
saving increases from $200 to $325, it may be concluded that her marginal propensity to:
Chapter 10 – Basic Macroeconomic Relationships
26. If the consumption schedule is a straight line, it can be concluded that the:
27. What would be the slope of the consumption schedule or consumption line for a given
economy?
28. If disposable income increases from $912 to $927 billion and MPC = 0.6, then
consumption will increase by:
Chapter 10 – Basic Macroeconomic Relationships
29. If disposable income decreases from $1800 to $1500 and MPC = 0.75, then saving will:
30. If the slope of a linear consumption schedule increases in a private, closed economy, then
it can be concluded that the:
31. The relationship between the MPS and the MPC is such that:
Chapter 10 – Basic Macroeconomic Relationships
32. The saving schedule shows the relationship of saving of households to the level of:
33. If households consume less at each level of disposable income, they are:
34. All of the following statements about consuming in excess of one’s disposable income are
true, except:
Chapter 10 – Basic Macroeconomic Relationships
35. Dissaving occurs when:
36. Refer to the saving schedule above. Dissaving occurs when disposable income is:
Chapter 10 – Basic Macroeconomic Relationships
37. Refer to the saving schedule above. The break-even income would be level:
38. Refer to the saving schedule above. As income falls from level 3 to level 2, the amount
of:
39. The fraction, or percentage, of total income which is saved is called the:
Chapter 10 – Basic Macroeconomic Relationships
40. If the slope of the consumption schedule is .75, then the slope of the saving schedule is:
41. In an economy, for every $10 million increase in disposable income, saving increases by
$2 million. It can be concluded that the:
42. In an economy, for every $1600 decrease in income, spending falls by $1200. It can be
concluded that the:
Chapter 10 – Basic Macroeconomic Relationships
43. When the marginal propensity to consume is less than 1, the:
44. With an MPS of .3, the MPC will be:
45. In a private closed economy, national income is $4.5 trillion and savings equals $6.4
billion. Based on this data, the marginal propensity to consume:
Chapter 10 – Basic Macroeconomic Relationships
46. Which of the following may shift the consumption schedule upward?
47. If the consumption schedule shifts downward, and the shift was not caused by a tax
change, then the saving schedule:
48. Which of the following would shift the consumption schedule downward?
Chapter 10 – Basic Macroeconomic Relationships
49. An increase in household wealth that creates a wealth effect shifts the:
50. The so-called wealth effect will result in households:
51. When consumers decide to increase household debt, this action will:
Chapter 10 – Basic Macroeconomic Relationships
52. Which of the following would shift the saving schedule upward?
53. The saving schedule would be shifted upward by:
54. If consumers expect prices to rise and shortages to occur in the future, then it will shift:
Chapter 10 – Basic Macroeconomic Relationships
55. As the consumption and saving schedules relate to real GDP, an increase in taxes will
shift:
56. What is the likely effect of a rise in real interest rates on consumption and saving in the
best of circumstances?
57. A lower real interest rate typically induces consumers to: