ECN 101 Lecture Notes - Lecture 28: Business Cycle, Real Income, Exponential Growth
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The average propensity to consume (APC) equals
the change in real disposable income divided by the change in consumption expenditures. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
the change in consumption expenditures divided by the change in real disposable income. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
real disposable income divided by consumption expenditures. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
consumption expenditures divided by real disposable income. The consumption function shows how much
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6. To study the macroeconomy we must combined prices and quantities generated in single-product markets into broad aggregates.
a) | True |
b) | False |
7. An economist who favored expanded government would recommend:
a) | tax cuts during recession and tax increases during inflation |
b) | tax increases during recession and tax cuts during inflation. |
c) | tax cuts during both recession and inflation |
d) | increases in government spending during a recession and tax increases during inflation. |
e) | tax cuts during recessions and reduction in government spending during inflation. |
8. If Government tax revenue exceeds Government spending the result of the budget is
a) | an increase in investment |
b) | a shortage |
c) | an increase in the deficit |
d) | a decrease in savings |
e) | a surplus |
9. Which of the following statements is true?
a) | In the US economy, the net export sector is positive. |
b) | Aggregate demand is the sum of total output produced by all firms in the US. |
c) | The aggregate supply curve is vertical if the price level is equal to the per-unit cost of production |
d) | Aggregate production sums up the four major components C+I+G+Xn in the US economy. |
e) | Government spending is the largest component of aggregate demand. |
10. Which of the following statements is true?
a) When unemployment is rising then real GDP is rising. | |
b) | The required reserve ratio is a tool used by the government to control the demand for money. |
c) | The four components of aggregate supply are the same as aggregate demand. |
d) | when an imported resource such as oil has decreased that is an increase in aggregate demand. |
e) | The four components of aggregate demand---Households, Business, Government, and Net Exports. |