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ECO 4223 Study Questions & Answers 100% Verified Correct| Latest Update
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ECO 4223 Study Questions & Answers 100% Verified Correct| Latest Update
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ECO 4223 Study Questions & Answers 100%Verified Correct| Latest Update
If the consumption function is C = 20 + 0.8YD, then an increase in disposable
income by $100 will result in an increase in consumer expenditure by:
a. 100
b. $80
c. $58
d. 20 - ✔✔$80
For a marginal propensity to consume of 0.75, the value of the multiplier is:
a. .25
b. 3
c. 2
d. 4 - ✔✔4
For every dollar increase in planned investment spending, aggregate output
increases by _______.
a. less than one dollar
b. more than one dollar
c. one dollar
d. two dollars - ✔✔more than one dollar
, In the Keynesian model of income determination, consumer expenditure includes
spending by:
a. governments on personal computers
b. foreigners on domestic personal computers
c. businesses on personal computers
d. consumers on personal computers - ✔✔consumers on personal computers
The Keynesian demand for real balances can be expressed as
a. Md/P = f(i,Y)
b. Md/P = f(Y)
c. Md/P = f(i)
d. Md= f(i,Y) - ✔✔Md/P = f(i,Y)
The Baumol-Tobin analysis suggests that
a. the speculative motive is nonexistent
b. velocity is unrelated to the transactions motive
c. the transactions component of the demand for money is negatively related to
the level of interest rates.
d. velocity is relatively constant - ✔✔the transactions component of the
demand for money is negatively related to the level of interest rates.
Which of the following statements concerning Keynesian analysis is false?
a. Keyne's analysis involves explaining why aggregate output is at a certain level
by understanding what factors affect each component of aggregate demand and
how the sum of these components could add up to an output smaller than the
economy is capable of producing, resulting in less than full employment.
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