What are the characteristics of a consumption function, given by the equation Consumption (C) = a + b(Y)? a is the interest rate, b is the tax rate a is the slope, b is autonomous spending a is autonomous spending, b is the slope a is the tax rate, b is the interest rate

a is autonomous spending, b is the slope

What is the marginal propensity to consume (MPC), and how does it vary with income levels? MPC is constant regardless of income Low MPC with low income, high MPC with high income MPC is irrelevant to income levels High MPC with low income, low MPC with high income

High MPC with low income, low MPC with high income

What is the total income equation in an economy? Aggregate Income (Y) = Investment (I) + Government Spending (G) Aggregate Income (Y) = Exports (X) - Imports (M) Aggregate Income (Y) = Taxes (T) + Transfers (TR) Aggregate Income (Y) = Consumption (C) + Savings (S)

Aggregate Income (Y) = Consumption (C) + Savings (S)

How do you find household savings from disposable income? Disposable income divided by expenses Disposable income times expenses Disposable income plus expenses Disposable income minus expenses

Disposable income minus expenses

What is the marginal propensity to save (MPS), and how does it affect the multiplier? Fraction of additional income spent, affects multiplier Fraction of additional income saved, affects multiplier Fraction of additional income taxed, affects multiplier Fraction of additional income invested, affects multiplier

Fraction of additional income saved, affects multiplier

How do you find the marginal propensity to save (MPS)? Change in income divided by change in savings Change in consumption divided by change in income Change in income divided by change in consumption Change in savings divided by change in income

Change in savings divided by change in income

What is planned investment in an economic context? Total investment including unplanned Investment in government bonds Amount firms intend to invest, excluding unplanned Investment in foreign assets

Amount firms intend to invest, excluding unplanned

What is planned aggregate expenditure in an economy? Total planned spending on new goods and services Total spending on exports Total spending on imports Total unplanned spending on goods and services

Total planned spending on new goods and services

The value of the housing services provided by the economy's owner-occupied houses is: included in GDP, and the actual mortgage payments made on the houses are used to estimate the value of these rental services. excluded from GDP since the value of these housing services cannot be estimated with any degree of precision. included in GDP, and the estimated rental values of the houses are used to place a value on these housing services. excluded from GDP since these services are not sold in any market.

included in GDP, and the estimated rental values of the houses are used to place a value on these housing services.

If net exports is a negative number for a particular year, then: the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year. consumption exceeded the sum of investment and government purchases during the year. the value of firms' inventories declined over the course of the year.

the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.

What is the correct formula for the GDP deflator? \[ \frac{\text{nominal GDP}}{\text{real GDP}} \times 100 \] \[ \frac{\text{real GDP}}{\text{nominal GDP}} \times 100 \] \[ \frac{\text{real GDP} - \text{nominal GDP}}{\text{nominal GDP}} \times 100 \] \[ \frac{\text{nominal GDP} - \text{real GDP}}{\text{real GDP}} \times 100 \]

\[ \frac{\text{nominal GDP}}{\text{real GDP}} \times 100 \]

In 2021, this country's economic indicators showed that: real GDP was $1250, and the GDP deflator was 138.9. real GDP was $900, and the GDP deflator was 138.9. real GDP was $900, and the GDP deflator was 128.0. real GDP was $1250, and the GDP deflator was 128.0.

real GDP was $900, and the GDP deflator was 138.9.

Which of the following is a correct way to measure productivity? Divide the quantity of output by the number of hours worked. Determine how much output is produced in a given time. Determine how much time it takes to produce a unit of output. Divide the number of hours worked by the quantity of output.

Divide the quantity of output by the number of hours worked.

Most entrepreneurs do not have enough money of their own to start their businesses. When they acquire the necessary funds from someone else: their consumption expenditures are being financed by someone else's investment. their consumption expenditures are being financed by someone else's saving. their investments are being financed by someone else's saving. their saving is being financed by someone else's investment.

their investments are being financed by someone else's saving.

A bond buyer is a: borrower. Long term bonds have more risk than short term bonds. saver. Long term bonds have less risk than short term bonds. borrower. Long term bonds have less risk than short term bonds. saver. Long term bonds have more risk than short term bonds.

saver. Long term bonds have more risk than short term bonds.

Skyline Chili wants to finance the purchase of new equipment for its restaurants. The firm has limited internal funds, so Skyline likely will: supply funds to the financial system by buying bonds. supply funds to the financial system by selling bonds. demand funds from the financial system by buying bonds. demand funds from the financial system by selling bonds.

demand funds from the financial system by selling bonds.

What are the 'other things' besides price level that can cause a shift or change in demand? Determinants of Aggregate Demand Price Elasticity Market Equilibrium Determinants of Supply

Determinants of Aggregate Demand

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