Disposable income is $5 billion and planned saving is $1.75 billion. What is the value of planned consumption expenditure?

$6.75 billion
$3.25 billion
0.35
0.65

The figure illustrates an economy's consumption function. What is the marginal propensity to consume in this economy?

1.20
0.70
1.43
0.95

The figure illustrates an economy's consumption function. What is the marginal propensity to save in this economy?

0.30
0.70
1.43
0.20

The figure illustrates an economy's consumption function. What is autonomous consumption in this economy?

$2.4 million
$3.8 million
$0
$1.0 million

Real GDP equals $35 billion and aggregate planned expenditure is $10 billion. There is an unplanned _______ in inventories of _______ and real GDP will __________.

decrease; $25 billion; increase
decrease; $35 billion; stay the same
increase; $10 billion; increase
increase; $25 billion; decrease

If a $75 billion increase in autonomous expenditure increases equilibrium expenditure by $120 billion, then the multiplier is _______________.

$45 billion
0.625
$120 billion
1.6

An economy has no imports and no taxes. The marginal propensity to save is 0.2. A __________ increase in autonomous expenditure increases equilibrium expenditure by $60 billion and the multiplier is _____________.

$75 billion; 12
$48 billion; 1.25
$300 billion; 5
$12 billion; 5

The slope of the aggregate expenditure curve decreases when the marginal propensity to consume _______ or the marginal propensity to import _______.

increases; decreases
increases; increases
decreases; decreases
decreases; increases

You observe that unplanned inventories are increasing. You predict that there will be _______.

an expansion
a trough
a business cycle
a recession

When the economy is at full employment and investment increases, the price level will ________ and in the long run real GDP will__________

increase; increase
decrease; not change
decrease; decrease
increase; not change

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