QUESTION 13 2 points Save Answer In 2017 your income increased from $42,000 to $48,000 and your spending increased $39,000 to $44,500. What was your Marginal Propensity to Consume (MPC) during 2017? O a. 1.01% o b. 94.52% 0 c. 91.66% 0 d. 93.95% QUESTION 14 2 points Save Answer The demand for quantity of loanable funds curve illustrates the relationship between the quantity demanded of loanable funds and O a. inverse; the interest rate 0 b.direct; GDP. 0 c. direct; the interest rate Q d. inverse; GDP I'he reason why there IS a direct relationship between the market interest rate and quantity of Ioanable tunds supplied IS because, _ O a. as the market interest rates rise opportunity cost of spending one's income decreases. O b. as the market interest rates rise opportunity cost of saving one's income decreases. O c. as the market interest rates rise opportunity cost of spending one's income also rises. Q d. as the market interest rates fall opportunity cost of spending one's income rises. QUESTION 16 2 points Save Answer Which of the following factors will increase demand (shift demand curve to the right and up) for loanable funds in the loanable funds market? 0 a. Future optimism or pessimism about investment opportunities. O b. Government borrowing. O c. change in interest rates. 0 d. both a and b. QUESTION 17 2 points Save Answer A business will want to borrow to undertake an investment project when the rate of return on that project is: O a, lower than the interest rate. O b. higher than the interest rate. O c. higher than the exchange rate. Q d. equal to the ination rate. Crowding out is a phenomenon: O a. in which an increase in the government's budget surplus decreases overall investment spending. 0 b.where overproduction in the goods market leads to a sharp drop in the aggregate price level. 0 c. where an increase in the government's budget decit causes overall investment spending to fall. 0 d.where an increase in imports causes the overall domestic production to fall. QUESTION 19 2 points Save Answer If interest rates in the loanable funds market are above the market equilibrium there will be a of loanable funds and interest rates will 0 a.shortage; fall 0 b.surplus; rise 0 c. shortage; rise 0 d.surplus; fall QUESTION 20 2 points Save Answer Autonomous consumption is O a. the change in consumption that results as a person's (or nation's) income increases or decreases. O b.that portion of total consumption that is dependent upon the level of income. 0 c, the steady increase in the consumption of goods and services that automatically occurs as a person grows from a child to an adult. 0 d.that portion of total consumption that is independent of the level of income. Suppose that the marginal propensity to consume is 0.8, and investment spending increases by $100 billion. The increase in aggregate demand (i.e. expenditure) is: O a. $100 billion, the same amount as investment spending. 0 b. $125 billion, composed of $100 billion in investment spending and $25 billion in consumption. 0 c, $80 billion, composed of $100 billion in investment spending and a decrease in consumption of $20 billion. 0 d. $500 billion, composed of $100 billion in investment spending and $400 billion in consumption. QU ESTI ON 22 2 points Save Answer According to Keynesian economics the most important factor affecting a household's consumer spending is: O a. its expected future disposable income. 0 b. its current disposable income. 0 c. its wealth. 0 d. the current interest rate. QU ESTI ON 23 2 points Save Answer Which of the following will shift the Aggregate Consumption Function upward? O a, Investment spending declining. O b. Consumer expectations turn more pessimistic about the future. 0 c. The stock market is strong and wealth is rising. 0 d. Disposable income falls