EC 2113 Exam 3 (Macroeconomics) Latest Exam
2024/2025
1. The fraction, or percentage, of total income which is consumed is called
the:
Average propensity to consume.
2. Dissaving occurs where:
Consumption exceeds income.
3. The multiplier effect indicates that:
A change in spending will change aggregate income by a larger amount.
4. One can determine the amount of any level of total income that is
consumed by:
Multiplying total income by the APC.
5. Personal saving is equal to:
Disposable income minus consumption.
6. Assume that MPS is 0.4. If spending increases by $8 billion, then real GDP
will increase by:
$20 billion
7. Suppose that a new machine tool having a useful life of only one year costs
$80,000. Suppose, also, that the net additional revenue resulting from
buying this tool is expected to be $96,000. The expected rate of return on
this tool is:
20 percent.
8. If the real interest rate increases:
, There will be a movement upward along the investment demand curve.
9. With an MPS of 0.3, the MPC will be:
1 - 0.3
10. An increase in household wealth that creates a wealth effect would shift
the:
Consumption schedule upward and the saving schedule downward.
11. A change in interest rates would shift the consumption schedule and the
saving schedule ______; a change in taxes would shift these two schedules
______.
In opposite directions; in the same direction.
12. If a family's MPC is 0.7, it means that the family is:
Spending seven-tenths of any increment to its income.
13. Suppose a family's consumption exceeds its disposable income. This
means that its:
APC is greater than 1.
14. A decline in the real interest rate will:
Increase the amount of investment spending.
15. As disposable income goes up, the:
Average propensity to consume falls.
16. An increase in taxes will shift both the consumption schedule and the
saving schedule down.
True.
17. Dissaving means:
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