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15 Cards in this Set

  • Front
  • Back
Which is not a determinant of Consumption and Saving?
c)technological change
d)real interest rate
If taxes shift to the right, which way does the consumption schedule shift? saving schedule?
consumption to the left. Saving to the left. (taxes and C+S are inversely related)
What does break even income mean?
It means that all income is consumed and none is saved
a)What is the relationship between consumption and disposable income on the 45 degree line?
b)What is the relationship between disposable income and saving
a) on the 45 line, consumption is equal to disposable income
b) they are directly related to one another
What would happen to your spending habits today if you expected the prices to rise tommorow
You would spend more today
what happens when income increases?
a)curve shifts to the right
b)curve shifts to the left
c)moves along the curve to the right
d)moves along curve to the left
What is the average propensity to consume?
the percentage or fraction of disposable income that people plan to spend on Goods and services
What are the two determinants of investment spending?
interest rates and expected returns
a)What is the relationship between expected rate of return and investment?
b)investment and interest rate
a) they are directly related
b) they are inversely related
which of the following is not a determinant of the investment demand curve?
c)excess capacity
d)household debts
What happens to the demand curve when the company is overstocked with supplies?
the expected rate of returns decreases so the demand curve decreases and thus moves to the left
Which of the following does not cause a fluctuation of investment?
c)irregularity of innovation
d)variability of profits and expectations
What is the multiplier effect?
the change in equilibrium GDP to the change in investment or any other component of aggregate expenditures
a)What is the relationship between the multiplier and MPC?
a) the multiplier is directly related to MPC
NJ tro once said "the economy of our future is in pearl. But we must not be so quick to judge the marketers and swindlers of our universe. The burden lies on land not in the sea." Discuss exactly who said this quote
NJ tro