4 points Save Answer The slope of the consumption function is also known measure

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4 points Save Answer The slope of the consumption function is also known measure . It is used to O a. marginal propensity to consume, the rate at which the public sector saves tax b. Marginal propensity to consume, the change in consumption when income (o O c. Marginal propensity to income, the rate at which consumption declines with O d. Average propensity to consume, the level of income (or GDP) produced at a given revenues GDP) changes increase in income level. consumption level. Question Completion Status: QUESTION 5 4 points Save Answer What do we mean when we say a country is experiencing "twin deficits? 0 a. Exports (X) are higher than imports (M) and government budget is in surplus O b. Imports (M) are higher than exports (X) and taxes are greater than government expenditure (G) higher than Imports (M) higher than Exports (X) O c. Govenment expenditure (G) is higher than tax revenues (Tx) and Exports (3) are O d. Government expenditure (G) is higher than Tax revenues (Tx) and imports (M) are QUESTION 6 4 points Save Answer Which of the following has the strongest and most direct influence over the level of investment spending? O a. Net Exports, an increase in them can increase investment O b.consumer confidence in future. An increase in it can make consumer save more O c. Interest rate charged on the loans by the banks. An increase in it can lower the construction activities O d. government expenditure (G) an increase in it can lower the investment 4 points Save Answer QUESTION 7 A change in which of the following can affect the level of consumption spending (C)? 0 a, total household income, an increase in income can induce consumers spend more. O b. consumers' wealth for example an increase in house prices can bring in extra wealth ° c. interest rate. An increase in this can increase saving and lower consumption O d. all of the above are correct statements. nte Save Answer

Explanation / Answer

4. The slope of the consumption function is also known as Marginal propensity consume, which shows change in consumption when income changes. MPC = (change in consumption / change in income)

Answer-option B

5. A country is experiencing twin deficit means it is experiencing both current account deficit (i.e. import is greater than export) and fiscal deficit (i.e. government expenditure is greater than tax revenue).

Answer- option D

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