The consumption function implies that Multiple Choice O Disposable income inversely influences consumption. O Consumption increases as disposable income increases. O Autonomous consumption changes when people have low incomes. O None of the choices are correct.Suppose a consumption function is given as C= $150 + 0.75 Yp. The marginal propensity to save is Multiple Choice O 150 O 0.25. O -0.75. O 0.75.Suppose a consumption function is given as C= $150 + 0.75 Yp. The marginal propensity to save is Multiple Choice O 0.25. O -0.75. O 150. O 0.75.The MPC + MPS must always equal Multiple Choice O The slope of the consumption function. O 0 . O 1 . O The APC.Keynes was concerned that at macroeconomic equilibrium in a laissez faire free market economy, full employment Multiple Choice O And price stability might not continue simultaneously. O Would continue but price stability might not. O Might not continue but price stability would. O None of the choices are correct.Which of the following causes a movement along the investment demand curve? Multiple Choice O The current level of income. O A change in expenditures. O A change in the rate of interest. O A change in technology.A recessionary gap Mu lple Choice Is the amount by which total spending exceeds GDP. Would cause a depletion of inventories. Would occur if total output were less than aggregate demand. 0 O O Q Is the amount by which the rate of actual spending falls short of full-employment GDP. Keynes was concerned that at macroeconomic equilibrium in a laissez faire free market economy, full employment Multiple Choice O And price stability might not continue simultaneously. O Would continue but price stability might not. O Might not continue but price stability would. O None of the choices are correct.The MPC indicates the fraction of Multiple Choice O Total income that will be saved. O Total income that will be spent. O An additional dollar of disposable income that will be saved. O An additional dollar of disposable income that will be spent.According to Keynes, cyclical unemployment is caused by too Multiple Choice O Much aggregate supply. O Little aggregate supply. O Little aggregate demand. O Much aggregate demand.The MPC indicates the fraction of Multiple Choice O An additional dollar of disposable income that will be saved. O An additional dollar of disposable income that will be spent. O Total income that will be saved. O Total income that will be spent.The MPC + MPS must always equal Multiple Choice O O . O The slope of the consumption function. O 1 . O The APC.Income Desire to Desire to Private Total (Output ) Spend Spend Spending Saving $500 $300 $250 $. $ 600 375 250 to $ 700 450 250 $ $ 800 525 250 $ $ Given the information in Table 9.2, saving equals investment at an income of Multiple Choice O $800 billion. O $700 billion. O $500 billion. $600 billion.According to Keynes, cyclical unemployment is caused by too Multiple Choice O Much aggregate demand. O Little aggregate supply. O Much aggregate supply. O Little aggregate demand.Which of the following causes a movement along the investment demand curve? Multiple Choice O A change in technology. O A change in the rate of interest. O The current level of income. O A change in expenditures.A sudden increase in confidence by the business community could best be represented by Multiple Choice O The consumption curve shifting downward. O An aggregate expenditure curve shifting downward. O An aggregate expenditure curve shifting upward. O The AS curve shifting downward.A recessionary gap Multiple Choice Would cause a depletion of inventories. Would occur if total output were less than aggregate demand. Is the amount by whlch the rate of actual spending falls short of full-employment GDP. Is the amount by which total spending exceeds GDP. O O O O A sudden increase in confidence by the business community could best be represented by Multiple Choice O An aggregate expenditure curve shifting downward. O An aggregate expenditure curve shifting upward. O The consumption curve shifting downward. O The AS curve shifting downward.Income Desire to Desire to Private Total (Output ) Spend Spend Spending Saving $500 $300 $250 $ 600 375 250 $ $ 700 450 250 $ $ 800 525 250 $ $ Given the information in Table 9.2, saving equals investment at an income of Multiple Choice O $500 billion. O $700 billion. O $600 billion. $800 billion.The consumption function implies that Multiple Choice O Disposable income inversely influences consumption. O Consumption increases as disposable income increases. O Autonomous consumption changes when people have low incomes. O None of the choices are correct.John Maynard Keynes argued that Multiple Choice O Macro failure is likely to occur, and it isn't likely to go away quickly. O Macro failure is unlikely to occur. O Macro failure is likely to occur but will go away quickly. O None of the choices are correct.If consumers spend 90 cents out of every extra dollar received, the Multiple Choice O MPC is 0.90. O MPS is 0.90. O Multiplier is 9. O Multiplier is 0.90.Full employment is estimated to occur at an unemployment rate Multiple Choice O Between 4 and 6 percent. O Equal to 0 percent. O Between 1 and 2 percent. O Between 10 and 12 percent.Spending Cycles Spending and Income Spending and Income First-cycle spending -$240 -$240 Second-cycle spending Third-cycle spending In Table 10.2, what is the cumulative decrease in expenditure by the end of the second cycle? Multiple Choice O -$420.00. O -$180.00. O -$480.00. O -$960.00.Given C =200 + 0.75 Yp. the multiplier is Multiple Choice O 0.75. O 0.25. Screen capture . now Screenshot taken Show in folder O 1.33. O 4. C Copied to clipboardAS P PRICE LEVEL P. AD . AD Q, Q, Q , REAL OUTPUT ($ billions per year) Figure 10.1 In Figure 10.1, suppose this economy is in equilibrium at point a and OF represents full employment output. Which of the following statements is true? Multiple Choice O Inventories are accumulating.Figure 10.1 In Figure 10.1, suppose this economy is in equilibrium at point a and OF represents full employment output. Which of the following statements is true? Multiple Choice O Inventories are accumulating. O Inventories are falling. O The economy is experiencing serious inflation problems. O There is no GDP gap.A demand-pull inflation problem can best be solved by Multiple Choice O An increase in aggregate demand. O A reduction in desired spending. O An increase in production of goods and services. O A reduction in aggregate supply.Inventory depletion is a warning sign of Multiple Choice O Deflation. O A drop in AS. O A drop in AD. O Inflation.A basic conclusion of Keynesian analysis is that Multiple Choice O Equilibrium GDP is consistent with full employment. O The economy self-adjusts to reach full employment and a stable price level. O Small macro disturbances can lead to much larger macro problems. O Equilibrium GDP is consistent with price level stability.The recessionary GDP gap represents the Multiple Choice O Leakages minus injections. O Amount by which actual investment differs from desired investment. O Amount by which aggregate demand must increase to reach full employment. O Value of the goods and services that could be produced but were not due to unemployed resources