Home / Questions / In Figure 9-1, line EBD is called A) the 45-degree line. B) the consumption function.
In Figure 9-1, line EBD is called
A) the 45-degree line.
B) the consumption function.
C) the saving function.
D) aggregate demand.
22) In Figure 9-1, line ABC is called
A) the 45-degree line.
B) the consumption function.
C) the saving function.
D) aggregate supply.
23) According to Figure 9-1, autonomous consumption equals
A) 0.
B) $5,000.
C) $20,000.
D) -$5,000.
Table 9-2
PlannedPlannedPlannedReal
ConsumptionSavingInvestmentGDP
$6,000-$1,000$1,000$5,000
10,0000_______10,000
14,0001,000_______15,000
18,0002,000_______20,000
22,000____________25,000
26,000____________30,000
24) According to Table 9-2, if real GDP is $30,000, planned saving equals
A) $2,000.
B) $3,000.
C) $4,000.
D) $5,000.
25) According to Table 9-2, the marginal propensity to consume is
A) 0.6.
B) 0.5.
C) 0.75.
D) 0.8.
26) If firms' unplanned inventories are increasing, then in a closed, private economy
A) the level of real national income will rise.
B) the level of real national income will not change in the foreseeable future.
C) actual consumption is greater than planned consumption.
D) consumers are saving more than businesses anticipated.
27) The consumption curve intersects the 45-degree reference line at $4 trillion. This indicates that
A) autonomous consumption spending is $4.1 trillion.
B) consumption spending is $4 trillion.
C) consumption spending is less than $4 trillion since taxes must be paid.
D) consumption spending is more than $4 trillion since taxes have been paid.
28) The break-even point on the consumption function represents the point where
A) consumption equals spending.
B) income equals consumption plus spending.
C) consumption is zero.
D) consumption equals income.
29) When a family's income is low, and it is spending more on consumption than it is receiving in income,
A) the APC must be increasing.
B) the APC must be equal to the ratio of planned consumption expenditure to total saving.
C) the MPC must be zero.
D) some segment of the consumption function curve lies above the 45-degree line, indicating dissaving.
30) At the break-even point for the consumption function
A) saving is positive.
B) saving is negative.
C) saving is zero.
D) the marginal propensity to consume equals l.
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