Macroeconomics
Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 10.2, Problem 4QQ
To determine

Consumption and disposable income.

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The multiplier is the ratio of the change in ________ to a change in ________. Select one: a. the level of saving; the level of consumption b. autonomous consumption; induced consumption c.Ā theĀ Ā MPC; theĀ Ā MPS d.Ā the equilibrium level of output; some autonomous variable
If Evan's income is reduced to zero after he loses his job, his consumption will be ________ and his saving will be ________. a.greater than zero; less than zero b.greater than zero; greater than zero c.less than zero; greater than zero d.less than zero; less than zero
The following table shows data for the economy before the decrease in saving. Suppose that the decrease in saving causes consumption to rise from $280 million to $320 million. Assume Say's law holds in this economy. Fill in the data for the economy after the decrease in saving. Ā  Before Saving Decrease After Saving Decrease Consumption (C) $280 million $320 million Investment (I) $200 million $ Ā  Ā million Government Purchases (G) $250 million $ Ā  Ā million Exports (EX) $500 million $500 million Imports (IM) $300 million $300 million Ā  As a result of the decrease in saving, total expenditures willĀ  Ā Ā .
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