This quiz assesses understanding of key macroeconomic concepts in Chapter 10, focusing on consumer spending, consumption, saving, and the relationship between income and spending. It is essential for students learning Economics to grasp these fundamental principles.
Level of bank credit
Level of income
Interest rate
Price level
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Save is 3/5
Consume is one half
Consume is 3/5
Consume is 2/5
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1.0 minus 0.4
0.4 minus 1.0
The reciprocal of the MPS
0.4
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Change in income that is not spent
Change in income that is spent
Given total income that is not consumed
Given total income that is consumed
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All the points where the MPC is constant
All the points at which saving and income are equal
All the points at which consumption and income is equal
The amounts households will plan to say that each possible level of income
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Average propensity to consume falls
Average propensity to save falls
Volume of consumption declines absolutely
Volume of investment to diminishes
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That the MPC increases in proportion to GDP
That households consume more when interest rates are low
That consumption depends primarily on the level of business investment
The amounts households intend to consume at various possible levels of aggregate income
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Consumption to the level of disposable income
Saving to the level of disposable income
Disposable income to disposable income
Consumption to saving
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Increases consumption by moving upward along a specific consumption schedule
Decreases consumption because it shifts the consumption schedule downward
Decreases consumption by moving downward along a specific consumption schedule
Increases consumption because it shifts the consumption schedule upward
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Change in consumption/change in income
Consumption/income
Change in income/change in consumption
Income/consumption
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A direct relationship between aggregate consumption and accumulated wealth
A direct relationship between aggregate consumption and aggregate income
An inverse relationship between aggregate consumption and accumulated financiaal wealth
An inverse relationship between aggregate consumption and the price level
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Change in income that is not spent
Change in income that is spent
Specific level of total income that is not consumed
Specific level of total income that is consumed
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Consumers will maximize their satisfaction where the consumption schedule and 45° line intersect
Up to a point, consumption exceeds income but then falls below income
The MPC falls as income increases
Households consume as much as they earn
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Be unaffected
Increase absolutely but remain constant as a percentage of income
Increase absolutely but decline as a percentage of income
Increase both absolutely and as a percentage of income
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APC plus APS equals one
APC plus MPS equals one
APS plus MPC equals one
APS plus MPS equals one
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Both the APC and the MPC increase as incomes rise
The APC is constant and the MPC declines as income rises
The MPC is constant and the APC declines as income rises
The MPC and the APC must be equal at all levels of income
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MPC is greater than zero but less than one
MPC and APC are equal at the point where the consumption schedules intersects the 45° line
APS is positive at all income levels
MPC is equal to or greater thaan one at all income levels
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Less than zero
Greater than one
Greater than zero but less than one
Two or more
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And saving both increase
And saving both decrease
Decreases and saving increases
Increases and saving decreases
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An inverse and stable relationship exists between consumption and income
A direct, but very volatile, relationship exists between consumption and income
A direct and relatively stable relationship exists between consumption and income
The two are usually equal
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Consumption and saving cannot be determined from the information given
Saving will be $20
Personal consumption expenditures must be $160
Saving will be $40
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The slope of the consumption schedule or line
The slope of the saving schedule or line
One divided by the slope of the consumption schedule or line
One divided by the slope of the savings schedule or line
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Relatively unstable
Relatively stable
Measurable
Unmeasurable
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.45
.20
.50
.90
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$180
$740
$60
$18
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An increase in stock prices
A decrease in stock prices
An increase in consumer indebtedness
A decrease in disposable income
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MPC is greater in B than A
APC at any given income level is greater in B than in A
MPS is smaller and B than in A
MPC is greater in A than in B
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The MPC is 1
The APC is 1
Savings is equal to consumption
The economy is in equilibrium
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Consumption spending will be $14,500
Consumption spending will be $15,500
Consumption spending will be $13,000
Savings will be $2500
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Spend 8/10 of any increase in his disposable income
Spend 8/10 of any level of disposable income
Break-even when his disposable income is $8000
Save 2/10 of any level of disposable income
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MPC is greater than 1
MPS is negative
APC is greater than 1
APS is positive
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$80
$100
$120
$160
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Households will consume three fourths of whatever level of disposable income they receive
Households will consume $35 if there disposable income is zero annd will consume three fourths of any increase in disposable income they receive
There is an inverse relationship between disposable income and consumption
Households will save $35 if there disposable income is zero and will consume three fourths of any increase in disposable income they receive
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The vertical intercepts would be +.6 and the slope would be +20
It would reveal an inverse relationship between consumption and disposable income
The vertical intercept would be negative, but consumption would increase as disposable income rises
The vertical intercept would be +20 and the slope would be +.6
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Multiplying total income by the slope of the consumption schedule
Multiplying total income by the APC
Subtracting the MPS from total income
Multiplying total income by the MPC
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MPC plus MPS equals APC plus APS
APC plus MPS equals APS plus MPC
APC plus MPC equals APS plus MPS
APC minus APS equals MPC minus MPS
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The same thing as disinvesting
That households are spending more than their current incomes
That saving and investment are equal
That disposable income is less than zero
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Income exceeds consumption
Saving exceeds consumption
Consumption exceeds income
Saving exceeds income
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1 - MPC + MPS
APS + APC = 1
MPS = MPC + 1
MPC + MPS = 1
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