) In Table 9-3, savings equal zero when real disposable income equals A) 0. B) $200. C)
) In Table 9-3, savings equal zero when real disposable income equals
42) In Table 9-3, the marginal propensity to consume is
43) Which of the following would be expected to shift the consumption function up?
A) decreases in wealth
B) expectations of harder times ahead
C) increases in the nation's population
D) changes in real disposable income
44) If the consumption function is above the 45-degree line drawn from the origin, then the saving function will
A) be positive.
B) be negative.
C) equal zero.
D) intersect the consumption function.
45) Autonomous consumption is
A) consumption spending that is earned rather than transferred from the government.
B) consumption spending that does not depend on the level of income.
C) the amount spent on consumption when saving equals zero.
D) consumption spending when the marginal propensity to consume is 1.
46) Where the consumption function crosses the 45-degree line,
A) savings will be negative.
B) consumption will equal only autonomous consumption.
C) the marginal propensity to consume is 0.5.
D) savings will be zero.
47) If the MPS = 0.1, then
A) the MPC = 0.9.
B) the APS = 0.1.
C) the APC = 0.9.
D) consumption equals $1,800 when income equals $2,000.
48) The MPC can best be defined as
A) that fraction of real disposable income that is consumed.
B) that fraction of real disposable income that is not consumed.
C) that fraction of a change in real disposable income that is spent.
D) that fraction of a change in real disposable income that is saved.
49) The fraction of a change in real disposable income that is spent is referred to as the
50) The marginal propensity to consume
A) shows how much real disposable income changes when consumption falls.
B) is greater than 1 only if the marginal propensity to save is greater than 1.
C) shows how much of an extra dollar of real disposable income is spent.
D) shows the percentage of real disposable income consumed at each level of income