QUESTION
Question 15
If Kojak's mpc is 0.80, this means that he will:
break even when his disposable income is $8000
spend eight-tenths of any level of disposable income.
Question 16
The wipe-out of roughly $16 trillion in household wealth during the Great Recession created a negative "media-wealth effect"; as applied to the Income-Expenditures model, this is shown by
an upward shift in the consumption function.
a movement along the consumption function, because wealth is the same thing as income
nothing at all--changes in wealth don't affect consumption, only income does
a downward shift of the consumption function.
save two-tenths of any level of income.
spend eight-tenths of any increase (as in change) in disposable income
Question 25
Which of the following is the primary explanation for big swings in the business cycle?
abrupt changes in stock market prices.
changes in consumption.
changes in investment.
changes in the mpc.
The 45-degree line in the Income-Expenditures diagram shows:
all points at which saving and income are equal.
all points where the mpc is constant
all points where aggregate expenditures equals real GDP/income.
recessionary gaps.
what's the 45-degree line?