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Question 1 1 pts The real interest rate is O the market rate of interest charged by banks. the rate of interest that banks charge their best customers. O the nominal rate of interest minus the inflation rate that individuals expect. O the expected inflation rate minus the cost of borrowing. Question 2 1 pts The largest component of aggregate expenditures is: government spending. business investment. O consumption spending by households. O net exports. Question 3 1 pts Changes in consumption spending are largely driven by changes in: tax credits. O income. investment returns. O government spending.Question 4 1 pts Autonomous consumption is: O that portion of consumption devoted to necessities. O consumption spending that is automatically taken from one's checking account each month. O the spending of the average household. O that portion of consumption spending that is not determined by income. Question 5 1 pts Marginal propensity to consume is: total consumption spending divided by total income. O the change in total consumption spending divided by the change in total income. O total consumption spending when total income is zero. O total consumption spending that is based on expected future income. Question 6 1 pts Disposable income is the amount a household has available for spending and saving: O after subtracting autonomous spending. O after subtracting taxes and adding in transfer payments to income. O sometimes called discretionary spending. O None of the above.Question 7 1 pts An increase in taxes disposable income, which consumption spending. O raises; increases O raises; decreases O lowers; decreases O lowers; increases Question 8 1 pts When real interest rates rise, the opportunity cost of current spending and the consumption function shifts O falls; upward O rises; upward O falls; downward O rises; downward Question 9 1 pts Which of the following is an example of an investment expenditure? O Ed buys a saving bond to celebrate his grandson's high school graduation. O Alicia buys stock in a green energy company. O A grocery store installs new energy efficient lighting throughout its stores. O Art buys a Monet painting.Question 10 1 pts A lower real interest rate shifts the aggregate expenditure line because it borrowing costs and induces households and business to spend upward; lowers; more O upward; lowers; less O downward; increases; more O downward; increases; less Question 11 1 pts If consumer confidence declines, how does this show in our analysis? O MCP declines. O The money supply increases. O Government spending increases. O Autonomous spending declines. Question 12 1 pts If MPS = 0.2 and Investment increases by 300 M, then GDP will? O increase by 375 M increase by 1500 M O decrease by 375 M O decrease by 1500 MQuestion 13 1 pts Which of the following events would cause the aggregate expenditure line to shift upward? Select all that apply. O The stock market rises. Income taxes rise. Expectations about future income prospects become more rosy. The real interest rate rises. Transfer payments increase O Rising incomes in Europe cause net exports to rise. Question 14 1 pts A decrease in interest rates will cause O consumption spending to rise. O investment spending to rise. O net exports to rise. O all of the above. O None of the above. Question 15 1 pts A negative RGDP gap is equivalent to an economy operating inside its PPF. True O False