24. Which of the following changes the slope of the consumption function?*

A change in 'a.'

A change in the MPC.

A change in 'i.'

None of the above affect the slope of the consumption function.

25. If households spent zero dollars with zero income, what would be the effect on the consumption function graph?*

The slope would decrease.

The location of 'a' would decrease to origin (0,0).

The x-intercept would decrease.

The value of 'a' would be a negative number.

26. If we need to see a positive change in real GDP (an increase in 'delta Y'), what are we experiencing on the Business Cycle?*

Expansion

Contraction

27. If an increase in spending can move an economy out of recession, which of the following two economies will get out of recession quicker (in theory)? Country A with a MPS of .25 OR Country B with a MPS of .10?*

Country A

Country B

28. Which of the following has the BIGGEST impact on GDP?*

Household spending in the product market.

Household spending in the factor market.

Government spending on goods and services.

The addition of transfer payments to low-income families.

29. Which country is likely to have consumer spending as a larger percentage of GDP?*

A country with a MPC of .5

A country with a MPC of .75

A country with a MPC of .8

A country with a MPC of .9

30. If we needed to slow spending to reduce inflation, which of the following would likely achieve that goal sooner?*

A country with a MPC of .5

A country with a MPC of .75

A country with a MPC of .8

A country with a MPC of .9