Chapter 10 – Basic Macroeconomic Relationships
57. Which of the following will not tend to shift the consumption schedule upward?
58. If the consumption schedule shifts upward and the shift was not caused by a tax change,
the saving schedule:
59. Which of the following will not cause the consumption schedule to shift?
Chapter 10 – Basic Macroeconomic Relationships
60. When consumption and saving are graphed relative to real GDP, an increase in personal
taxes will shift:
61. If for some reason households become increasingly thrifty, we could show this by:
Chapter 10 – Basic Macroeconomic Relationships
62. Suppose the economy’s saving schedule shifts from S1 to S2 as shown in the above
diagram. We can say that its:
63. Assume the economy’s consumption and saving schedules simultaneously shift
downward. This must be the result of:
Chapter 10 – Basic Macroeconomic Relationships
64. Refer to the above diagram. Suppose an economy’s consumption schedule shifts from C1
to C2 as shown in the diagram. We can say that its:
65. Refer to the above data. The marginal propensity to consume is:
Chapter 10 – Basic Macroeconomic Relationships
66. Refer to the above data. At the $200 level of disposable income:
67. Refer to the above data. If disposable income was $325, we would expect consumption to
be:
Chapter 10 – Basic Macroeconomic Relationships
68. Refer to the above diagram. The marginal propensity to consume is equal to:
69. Refer to the above diagram. At income level F the volume of saving is:
70. Refer to the above diagram. Consumption will be equal to income at:
Chapter 10 – Basic Macroeconomic Relationships
71. Refer to the above diagram. The economy is dissaving:
72. Refer to the above diagram. The marginal propensity to save is:
Chapter 10 – Basic Macroeconomic Relationships
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73. The above figure suggests that:
74. Refer to the above figure. If the relevant saving schedule were constructed:
Answer the question on the basis of the following data for a hypothetical economy.
Chapter 10 – Basic Macroeconomic Relationships
75. Refer to the above data. The marginal propensity to consume is:
76. Refer to the above data. At the $100 level of income, the average propensity to save is:
77. Refer to the above data. If plotted on a graph, the slope of the saving schedule would be:
Chapter 10 – Basic Macroeconomic Relationships
78. Refer to the above diagram. The marginal propensity to save is equal to:
79. Refer to the above diagram. At disposable income level D, the average propensity to save
is equal to:
Chapter 10 – Basic Macroeconomic Relationships
80. Refer to the above diagram. At disposable income level D, consumption is:
81. Refer to the above diagram. Consumption equals disposable income when:
82. The saving schedule shown in the above diagram would shift downward if, all else equal:
Chapter 10 – Basic Macroeconomic Relationships
Answer the question on the basis of the following consumption schedules. DI signifies
disposable income and C represents consumption expenditures. All figures are in billions of
dollars.
83. Refer to the above data. The marginal propensity to consume in economy (1) is:
84. Refer to the above data. The marginal propensity to consume:
Chapter 10 – Basic Macroeconomic Relationships
85. Refer to the above data. The marginal propensity to save:
86. Refer to the above data. At an income level of $40 billion, the average propensity to
consume:
87. Refer to the above data. At an income level of $400 billion, the average propensity to save
in economy (2) is:
Chapter 10 – Basic Macroeconomic Relationships
88. (Advanced analysis) Refer to the above data. When plotted on a graph, the vertical
intercept of the consumption schedule in economy (3) is _____ and the slope is ____.
89. Refer to the above data. Suppose that consumption decreased by $2 billion at each level of
DI in each of the three countries. We can conclude that the:
90. Refer to the above data. A $2 billion increase in consumption at each level of DI could be
caused by:
Chapter 10 – Basic Macroeconomic Relationships
91. Refer to the above diagram. The marginal propensity to consume is:
92. (Advanced analysis) The equation for the above saving schedule is:
Chapter 10 – Basic Macroeconomic Relationships
93. Refer to the above diagram. The average propensity to consume:
94. Refer to the above diagram. The break-even level of income is:
Chapter 10 – Basic Macroeconomic Relationships
10–37
95. Refer to the above diagram. The marginal propensity to consume is:
96. (Advanced analysis) Refer to the above diagram. The equation for the consumption
schedule is:
(Advanced analysis) Answer the question on the basis of the following data:
Chapter 10 – Basic Macroeconomic Relationships
97. Which of the following equations correctly represents the above data?
98. Which of the following equations represents the saving schedule implicit in the above
data?
99. The investment demand curve portrays an inverse (negative) relationship between:
Chapter 10 – Basic Macroeconomic Relationships
100. The investment demand slopes downward and to the right because lower real interest
rates:
101. Other things equal, a decrease in the real interest rate will:
102. Suppose that a new machine tool having a useful life of only one year costs $80,000.
Suppose, also, that the net additional revenue resulting from buying this tool is expected to be
$96,000. The expected rate of return on this tool is:
Chapter 10 – Basic Macroeconomic Relationships
103. Assume a machine which has a useful life of only one year costs $2,000. Assume, also,
that net of such operating costs as power, taxes, and so forth, the additional revenue from the
output of this machine is expected to be $2,300. The expected rate of return on this machine
is:
104. Assume a machine which has a useful life of only one year costs $2,000. Assume, also,
that net of such operating costs as power, taxes, and so forth, the additional revenue from the
output of this machine is expected to be $2,300. If the firm finds it can borrow funds at an
interest rate of 10 percent the firm should:
105. The relationship between the real interest rate and investment is shown by the: