Question

Question 11 An increase in consumption might be caused by a(n): Question 11 options: A) increase...

Question 11

An increase in consumption might be caused by a(n):

Question 11 options:

A)

increase in income tax rates.

B)

recession.

C)

wealth effect of an increase in stock market prices.

D)

increase in saving.

Question 12

A decrease in consumption is caused by a(n):

Question 12 options:

A)

decrease in the real interest rate.

B)

decrase in taxes.

C)

anticipation of higher prices in the future.

D)

decrease in borrowing.

Question 13

Demand-pull inflation:

Question 13 options:

A)

occurs when prices of resources rise, pushing up costs and the price level.

B)

occurs only when the economy has reached its absolute production capacity.

C)

occurs when total spending exceeds the economy's ability to provide output at the existing price level.

D)

is also called cost-push inflation.

Question 14

If the Consumer Price Index rises from 300 to 333 in a particular year, the rate of inflation in that year is:

Question 14 options:

A)

91 percent.

B)

11 percent.

C)

33 percent.

D)

10 percent.

Question 15

Suppose a family's consumption exceeds its disposable income. This means that its:

Question 15 options:

A)

MPC is greater than 1.

B)

APC is greater than 1.

C)

APS is positive.

D)

MPS is negative.

Homework Answers

Answer #1

11) Option C. Higher wealth accumulated will create a wealth effect and consumer will feel rich even when income is unchanged

12) Option D. When borrowing is reduced, it is natural that the consumption falls

13) Option C. This is basically the result of a tendency to buy more goods and services than what is available in the economy or what it is capable of producing.

14) Option .B Inflation rate is (333 - 300)*100/300 = 11%.

15) Option B. APC measures consumption income ratio so when consumption > income, APC is > 1.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 6 Which of the following is correct? Question 6 options: A) APS + MPC =...
Question 6 Which of the following is correct? Question 6 options: A) APS + MPC = 1. B) APC + APS = 1. C) APC + MPS = 1. D) APS + MPS = 1. Save Question 7 The greater is the marginal propensity to consume, the: Question 7 options: A) smaller is the average propensity to consume. B) higher is the interest rate. C) smaller is the marginal propensity to save. D) lower is the price level Question 8...
Assume that the consumption schedule in the US economy is given by C= $20 billion +...
Assume that the consumption schedule in the US economy is given by C= $20 billion + 0.8D Where C is consumption in billion and D is disposible income (in billion) . Answer the following a) Obtain marginal propensity to consume (MPC) and marginal propensity to save (MPS). b) Obtain consumption, average propensity to consume (APC) and  marginal propensity to save  (APS), when D = $200 billion. c) obtain the tax multiplier and spending multiplier. d) Suppose a negative demand shock caused real...
Inflation is undesirable because it: Question 1 options: A) invariably leads to hyperinflation. B) arbitrarily redistributes...
Inflation is undesirable because it: Question 1 options: A) invariably leads to hyperinflation. B) arbitrarily redistributes real income and wealth. C) reduces everyone's standard of living. D) usually is accompanied by declining real GDP. Question 2 Which of the following will not tend to shift the consumption to increase? Question 2 options: A) A currently small stock of durable goods in the possession of consumers. B) The expectation of a future decline in the consumer price index. C) The expectation...
Aggregate supply shifts to the left when: Question 15 options: a) there is a decrease in...
Aggregate supply shifts to the left when: Question 15 options: a) there is a decrease in regulations. b) subsidies are higher. c) input prices rise. d) inflation expectations are lower.
In March 2013 the Fed announced that it might decrease its open market purchases of securities...
In March 2013 the Fed announced that it might decrease its open market purchases of securities by the end of the year. This announcement suggests that the Fed is concerned that a. the unemployment rate will increase. b. the inflation rate will rise. c. the federal funds interest rate will fall too low for the Fed to control it. d. the federal funds interest rate will rise too high for the Fed to control it. In the aggregate supply-aggregate demand...
Q 1 If the CPI in year 2 equals 210 and the CPI in year 3...
Q 1 If the CPI in year 2 equals 210 and the CPI in year 3 equals 221, it can be concluded that consumer prices. The inflation rate rose from year 2 to year 3 by Q51. The investment demand curve will shift to the left if: a. the interest rate decreases.                                                   b. the interest rate increases. c. expected returns on investment increase.                             d. business taxes increase. Q54. The consumption schedule is: A) an inverse relationship between consumption and the...
Liver disease causes: Question options: a) An increase in protein synthesis and a corresponding increase in...
Liver disease causes: Question options: a) An increase in protein synthesis and a corresponding increase in GFR b) A decrease in protein synthesis and a corresponding decrease in net filtration pressure c) A decrease in oncotic pressure and a corresponding increase in GFR d) Both b and c above are correct e) None of the above are correct
1. The primary derivative instruments in use today are Question options: A. real estate loans B....
1. The primary derivative instruments in use today are Question options: A. real estate loans B. Treasury bonds C. plan vanilla derivatives D. futures, options, and swaps. E. Municipal bonds 2. AIG almost went bankrupt in 2008 because Question options: A.the value of the securities underlying its credit default swaps declined significantly. B. it lacked the collateral required by buyers of its credit default swaps. C. prices of securities underlying their credit default swaps were hard to determine since they...
1. Expectations that disposable income will increase in the future will a. shift the current consumption...
1. Expectations that disposable income will increase in the future will a. shift the current consumption function up b. shift the current consumption function down c.result in a movement upward along the current consumption function d. make the current consumption function flatter e. make the current consumption function steeper 2. The partners in the Wonderwords word processing firm spend $12,000 on computers, hoping to earn an additional $1,000 per year with them. If the partners could earn 7 percent interest...
1- The coronavirus has caused the value of the US dollar to increase relative to foreign...
1- The coronavirus has caused the value of the US dollar to increase relative to foreign currencies. As a result, the _____ curve of the US has shifted to the _____. This will cause the inflation rate to _____ and the real GDP growth rate to _____. a- LRAS; left; decrease; increase b- LRAS; right; decrease; increase c- LRAS; left; increase; decrease d- AD; right; increase; increase e-  AD; left; decrease; decrease --------------------------------------------------------- 2- The coronavirus has caused countries throughout the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT