economics quiz IV

In the Keynesian private closed economy aggregate demand is equal to

• X - 1 = 0

• Ig - S = 0

• C + Ig

• None of these

As disposable income decreases, consumption

• and savings both increase

• and savings both decrease

• increases and savings decreases

• decreases and savings increases

Determinants of the consumption/savings relationship would include all but the following

• wealth

• income

• income taxes

• inventories

Generally speaking, the greater the MPS

• the greater the consumption

• the greater the investment

• the greater the increase in GDP

• none of these

If the level of GDP increased by $100 billion and the MPC was .5, then aggregate expenditures were

• $100 billion

• $50 billion

• $500 billion

• $5 billion

If the marginal propensity to save is .25, then the multiplier will add

• 4 times to GDP

• 10 times to GDP

• 6 times to GDP

• none of these to GDP

In the Keynesian economic model, savings must be offset by

• consumption at equilibrium

• taxes at equilibrium

• gross investment at equilibrium

• none of these at equilibrium

Keynes argued that the

• supply curve drove full employment

• bell curve drove full employment

• demand curve drove full employment

• all of these drove full employment

Say's Law maintained all but

• workers would accept lower wages

• supply creates its own demand

• government intervention in the economy was important

• none of these

The demand for capital is influenced by all but

• cost

• technology

• business taxes

• imports