Econ question?

37. The consumption function relates consumption spending to


a. the price level


b. interest rates


c. disposable income


d. expectations about the price level


e. household wealth








38. Suppose that when disposable income rises from $5.2 trillion to $6.0 trillion, consumption rises from $5.0 trillion to $5.6 trillion. What is the marginal propensity to save?


a. 0.25


b. 0.33


c. 0.75


d. 0.67


e. 0.07





39. The marginal propensity to consume


a. is the proportion of disposable income consumed


b. is the reciprocal of the ratio of disposable income to saving


c. is the change in consumption relative to a change in disposable income


d. minus the marginal propensity to save must equal 1


e. is greater than 1 at all levels of income








40. Along the aggregate consumption function, an increase in income will


a. cause autonomous consumption to rise


b. shift the consumption function upward


c. cause a corresponding downward shift of the saving function


d. cause movement along the given consumption function


e. shift the consumption function downward





1. Expectations that disposable income will increase in the future will


a. shift the current consumption function up


b. shift the current consumption function down


c. result in a movement upward along the current consumption function


d. make the current consumption function flatter


e. make the current consumption function steeper





42. A household that expects a decrease in disposable income in the future will


a. increase its current consumption spending


b. decrease its current consumption spending


c. maintain its current consumption spending


d. increase its current consumption spending, then increase spending when income falls


e. decrease its current consumption spending, then increase spending when income falls





43. The non-income determinants of consumption include all of the following except one. Which is the exception?


a. net wealth


b. the profitability of new investment


c. the price level


d. expectations


e. the interest rate





44. Dennis spends $400 on a snowblower, expecting to earn $80 per year for each of the next five years clearing out his neighbors' driveways. The rate of return he expects on this investment is


a. 500 percent per year


b. 100 percent per year


c. 80 percent per year


d. 25 percent per year


e. 20 percent per year

Econ question?
37.The consumption function relates consumption spending to


a.the price level


b.interest rates


c.disposable income


d.expectations about the price level


e.household wealth








38.Suppose that when disposable income rises from $5.2 trillion to $6.0 trillion, consumption rises from $5.0 trillion to $5.6 trillion. What is the marginal propensity to save?


a.0.25 (200 bilion extra savings out of 800 billion extra income)





39.The marginal propensity to consume


c.is the change in consumption relative to a change in disposable income





40.Along the aggregate consumption function, an increase in income will


d.cause movement along the given consumption function





1.Expectations that disposable income will increase in the future will


c.result in a movement upward along the current consumption function





42.A household that expects a decrease in disposable income in the future will


b.decrease its current consumption spending





43.The non-income determinants of consumption include all of the following except one. Which is the exception?


b.the profitability of new investment





44.Dennis spends $400 on a snowblower, expecting to earn $80 per year for each of the next five years clearing out his neighbors' driveways. The rate of return he expects on this investment is


e.20 percent per year


( assumng that the resale value of the snowblower is $400: actually he gets negative return if after 5 years the snowblower has a resale value of zero)