6. When income is equal to consumption, savings is a) negative b) positive c) ze

Question

6. When income is equal to consumption, savings is

a) negative

b) positive

c) zero

d) impossible to calculate

7. When Aggregate Disposable Income (Yd) levels are very low, C is likely

a) to be negative

b) to be zero

c) to be less than income

d) to be greater than income

e) none of the above answers is correct

8. Which of the following properly describe the Aggregate Supply (AS) Curve in the Keynesian view?

a) the AS curve is almost nearly vertical representing a full employment of the economy's factors of production

b) the AS curve is nearly vertical representing unemployment

c) the AS curve has a horizontal portion reflecting full employment of the economy's factors of production

d) the AS curve has a horizontal portion reflecting less than full employment of the economy's factors of production

e) none of the above describe the AS curve in the Keynesian view.

9. Which of the following relationships is not correct?

a) MPC+MPS=1

b) APC+APS=1

c) MPS=MPC+1

d) 1- APS=APC

e) 1- MPC=MPS

10. Induced consumption expenditures ____________________.

a) fall as income rises

b) are always equal to autonomous consumption expenditures

c) plus saving equals total consumption expenditures

d) represent consumption that is independent of income

Explanation / Answer

6.c) zero......................... 7. c) to be less than income.................... 8. b) the AS curve is nearly vertical representing unemployment........................................................................... 9. c) MPS=MPC+1................................... 10. d) represent consumption that is independent of income................

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