# Macro Econ Final Review-quiz

19 Questions | Total Attempts: 139  Settings  Macro Econ Final Review-Quiz

• 1.
What is the Marginal Propensity to Consume, or MPC?
• A.

The fraction or proportion of any change in income that is saved

• B.

The fraction or percentage of income consumed

• C.

The fraction or proportion of any change in income that is consumed

• D.

None of the above

• 2.
How do you calculate Marginal Propensity to Consume, or MPC?
• A.

MPC= change in consumption/ change in income

• B.

MPC= change in savings/ change in income

• C.

MPC= consumption/ income

• D.

None of the above

• 3.
What is the Marginal Propensity to Save, or MPS?
• A.

The fraction or percentage of income consumed

• B.

The fraction or proportion of any change in income that is consumed

• C.

The fraction or proportion of any change in income that is saved

• D.

The savings divided by the income

• 4.
How do you calculate Marginal Propensity Savings, or MPS?
• A.

MPS= change in savings/ income

• B.

MPS= change in savings/ change in income

• C.

MPS= change in consumption/ change in income

• D.

MPS= savings/ income

• 5.
What is the Average Propensity to Consume, or APC?
• A.

The fraction or proportion of any change in income that is consumed

• B.

The fraction or percentage of income saved

• C.

The fraction or proportion of any change in income that is saved

• D.

The fraction or percentage of income consumed

• 6.
How do you calculate APC?
• A.

APC= consumption/ income

• B.

APC= change in consumption/ change in income

• C.

APC= savings/ income

• D.

APC can't be calculated

• 7.
What is the Average Propensity to Save, or APS?
• A.

The fraction or percentage of income consumed

• B.

The fraction or proportion of any change in income that is saved

• C.

The fraction or percentage of income saved

• D.

None of the above

• 8.
How do you calculate APS?
• A.

APS= savings/ income

• B.

APS= consumptions/ income

• C.

APS= change in savings/ change in income

• D.

APS= savings+consumption/ income

• 9.
What are the non-income determinants of consumption?
• A.

Wealth, inflation, taxation, household debts and investments

• B.

Investments, wealth, household debt, consumption and expectations

• C.

Household debt, expectations, inflation, savings and soncumption

• D.

Wealth, expectations, real interest rates, household debt and taxation

• 10.
If wealth increases, what will happen to the consumption and savings schedules?
• A.

Consumption schedule will shift up and savings will shift down

• B.

Consumption schedule will shift up and savings will shift up

• C.

Consumption schedule will shift down and savings will shift up

• D.

Consumption schedule will shift down and savings will shift down

• 11.
What happens when interest rates decline?
• A.

It decreases the incentive to borrow and consume and reduces the incentive to save.

• B.

It increases the incentive to borrow and consume and reduces the incentive to save.

• C.

It decreases the incentive to borrow and consume and increases the incentive to save.

• D.

None of the above

• 12.
Lower debt levels can:
• A.

Shift the consumption schedule up and the saving schedule up

• B.

Shift the consumption schedule up and the saving schedule down

• C.

Shift the consumption schedule down and the saving schedule down

• D.

Shift the consumption schedule down and the saving schedule up

• 13.
Lower taxes will:
• A.

Shift the consumption schedule down and the savings schedule up; vice versa for higher taxes

• B.

Shift the consumption schedule up and the savings schedule down; vice versa for higher taxes

• C.

Shift both schedules down since taxation affects both spending and saving; vice versa for higher taxes

• D.

Shift both schedules up since taxation affects both spending and saving; vice versa for higher taxes

• 14.
Expected rate of return:
• A.

Determines the cost of investment

• B.

The marginal benefit and the interest rate- the cost of borrowing funds- represents the marginal cost.

• C.

Represents the cost of borrowed funds

• D.

Represents the opportunity cost of investing your own funds

• 15.
How do you calculate the expected rate of return?
• A.

R= TR(total revenue) - TC (total cost) / investment

• B.

R= TC(total cost) - TR (total revenue) / investment

• C.

R= investment / TR(total revenue) - TC (total cost)

• D.

None of the above

• 16.
Real interest rate:
• A.

Determines the cost of investment and represents either the cost of borrowed funds or the opportunity cost of investing your own funds

• B.

Represents the marginal cost

• C.

Can be found by comparing the expected economic profit

• D.

None of the above

• 17.
Investment is a very (blank) type of spending. I is more volatile than GDP.
• 18.
What is the multiplier?
• A.

A non-rippling effect that generate large changes in real GDP

• B.

Determines the what the initial change in spending is

• C.

Determines how large the change between changes in spending and changes in real GDP will be.

• D.

All of the above

• 19.
How do you calculate the multiplier?
• A.

Multiplier= 1 / MPS

• B.

Multiplier= change in real GDP / initial change in spending

• C.

Multiplier= 1 / (1-MPC)

• D.

All the above

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