Consumption spending - Study guides, Class notes & Summaries

gross domestic product (GDP) - market value of all final goods and services produced within a country GDP = C + I + G + (X-M) C= personal consumption I = private investment G = government spending X = exports M = imports (C = 2/3 of US GDP) provides backdrop for investing bc is a measure of all economic activity "actual GDP growth has entirely lost its capacity to surprise... leading indicators... PMI garners disproportionate attention" nominal GDP vs real GDP - nominal GDP = $ amo...

Which of the following changes results from a decrease in an economy's disposable income? A rightward shift of the consumption function An upward movement along the consumption function A leftward shift of the consumption function A downward movement along the consumption function correct answers A downward movement along the consumption function Which of the following is considered a leakage in the circular flow model? Business spending Total exports Investment spending Househol...

4 Components of GDP Correct Answer-1) Consumption Spending (not including spending on new houses) 2) Investment Spending (drops MORE in a recession) 3) Government Purchases (does not include transfer payments, i.e. social security) 4) Net Exports (exports - imports) GDP Equals Correct Answer-Total Production = Total Income GDP Correct Answer-Market Value of all Final Goods and Services Produced in a Country in a Year What is NOT Included in GDP Correct Answer-Underground Economy and ...

The functions of money are to serve as a Multiple Choice  resource allocator, a method for accounting, and a means of income distribution.  unit of account, a store of value, and a medium of exchange. Correct  determinant of consumption, investment, and government spending.  factor of production, exchange, and aggregate supply. Which of the following functions of money enables society to gain the benefits of geographic and labor specialization? Multiple Choice  unit of a...

moral hazard - ANSWER behaving differently when you know someone else is taking the risk (Induced demand) adverse selection - ANSWER the sicker people likely want more insurance (the healthier, less) Asymmetries of information Healthcare - ANSWER Physician vs. patient (vs. 3rd Party payer) Uncertainty and Health Care - ANSWER financing health care in the United States is a complex matter •Workarounds •Redundancies •Contradictions single national payment system - ANSWER...

Multiplier effect correct answers The increase in consumer spending that occurs when spending by one person causes others to spend more too Disposable income correct answers Income left after paying taxes -consumption is based on the amount of disposable income -people usually consume part of their disposable income and save the rest MPC correct answers Marginal propensity to consume -the amount consumption increases when disposable income increases by $1 -the MPC is a number between 0...

normative statement an opinion that cannot be confirmed by referencing facts positive statement a statement that can be proved by referencing facts why are economic models used? theories cannot be tested in a controlled environment the basic economic problem scarcity - consumer wants are always greater than available resources opportunity cost the next best alternative foregone factors of production resources used by a firm in production list and define the factors of production lab...

UNIQUE NUMBER: PREVIEW OF QUESTION 1 1. 1 Reference: Prescribed book PG 361 The inverse relationship between the price level and the quantity of aggregate output demanded by households, firms, the government, and the rest of the world 1. 1 Reference: Prescribed book PG 361 The inverse relationship between the price level and the quantity of aggregate output demanded by households, firms, the government, and the rest of the world 2. 1 Reference: Prescribed book PG 362 If a fall...

Which driver weakened the Swiss franc? (C) - correct answer a) A surprise change in net export expectations b)A surprise change in interest rates expectations c)A surprise change in inflation expectations d)A surprise change in valuation expectations How accurately do GDP portray the economy and why? - correct answer Inaccurately because the scope of GDP measurements can change. Consider the formula GDP = C+I+G+(X-M). A country is undergoing a boom in consumption of domestic and foreign...

ECS2602 EXAM STUDY PACK 2022. ECS2602 - Macroeconomics In the goods market model a decrease in taxes will result in … a) an increase in autonomous consumption. b) an increase in disposable income. c) an increase in income. d) a decrease in induced consumption. 1) a, b and c 2) a, b and d 3) b, c and d 4) a, c and d 5) None of the options 1 to 4 (correct option is 5.) Explanation A decrease in taxes increases disposable income and consequently induced consumption spending increases...