Questions:
• What is the value of the average propensity to consume at $200 real GDP?
• What is the value of the average propensity to consume at $400 real GDP?
• What is the value of the average propensity to save at $200 real GDP?
• What is the value of the average propensity to save at $400 real GDP?
• What is the value of the marginal propensity to consume?
• What is the value of the marginal propensity to save?
• If this nation consumes $50 more at each level of real GDP than shown in the table, is this a SHIFT in the consumption function or a
MOVEMENT ALONG the consumption function?
• If the nation's level of real GDP decreases from $440 to $280, is this a SHIFT in the consumption function or a MOVEMENT ALONG the consumption function?
• Compute the value of the Keynesian spending multiplier.
• Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in investment expenditures.
• Give the amount of the change in the equilibrium level of Real GDP due to a $4 decrease in consumption expenditures.
• Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in investment expenditures.
• Give the amount of the change in the equilibrium level of Real GDP due to a $4 decrease in consumption expenditures and a $6 increase in investment expenditures at the same time.
• Suppose the equilibrium level of Real GDP decreases by $20. What was the amount of the change in autonomous expenditures which caused this to happen?
• none
• none
• Use shifts of the AD and AS curves to explain the cost-push inflation of the 1970s.
• What is the mathematical term to describe the relationship between real consumption and real GDP?
• What is the mathematical term to describe the relationship between real saving and real GDP?
• What happens to the value of the APC as real GDP decreases?
• What happens to the value of the APS as real GDP decreases?
• APC + APS = MPC + MPS: TRUE OR FALSE?
• Briefly summarize Say's Law.
• Briefly summarize the Classical view of how the economy works.
• What historical event caused a change in thinking about the way the economy works?
• Briefly summarize the Keynesian view of how the economy works.
• What is the difference between the investment demand curve for a business and the investment schedule for an economy?
• What is the difference between the equilibrium level of real GDP and the full-employment level of real GDP in the Keynesian model?