Question 1

Compare and discuss determinants of aggregate consumption.
-How does aggregate consumption behave over the business cycle?

Accepted Answer

Consumption rises during expansions but more slowly than income During contractions, consumption is relatively flat

Question 2

Whats defention of terms:
-dis-saving

Accepted Answer

The answer of Whats defention of terms:
-dis-saving...

Question 3

Whats defention of terms:
-consumption function

Accepted Answer

The answer of Whats defention of terms:
-consumption function...

Question 4

The wealthy tend to have

Accepted Answer

A)   higher average propensities to consume
B)   higher average propensities to save.
C)   lower average propensities to save.
D)   the same average propensity to consume as less wealth persons.

Question 5

Diagram 42a
 
-Diagram 42a indicates that

Accepted Answer

A)   consumption is unrelated to income.
B)   consumption is positively related to income.
C)   consumption is inversely related to income.
D)   consumption is constant.

Question 6

Why consumers tend to purchase less if they have less wealth (or more debt) , even if their income remains constant?

Accepted Answer

A)   consumers are irrational.
B)   consumers may feel richer, so they increase their savings in order to emulate the wealthy.
C)   consumers may feel poorer, so they want to increase their savings.
D)   consumers may already have bought all they want. C

Question 7

Diagram 42a
 
-Diagram 42a indicates that

Accepted Answer

A)   consumption increases faster than income.
B)   income is always less than consumption.
C)   consumption is always less than income.
D)   income increases faster than consumption.

Question 8

Keynes believed that consumer demand in the aggregate is determined primarily by

Accepted Answer

A)   the interest rate.
B)   the rate of inflation.
C)   national income.
D)   government spending.

Question 9

Compare and discuss determinants of aggregate consumption.
-Why do people purchase less if they have less wealth, even if their income remains constant?

Accepted Answer

The answer of Compare and discuss determinants of aggregate consumption.
-Why...

Question 10

Brad and Angie own a nice house worth $400,000. They have 2 cars worth $20,000 each, and $5,000 in the bank. They recently borrowed $100,000 on their house in order to send their daughter, Jennifer, to college. They also gave Jennifer a credit card for her expenses, and the balance is now $10,000. How much wealth do Brad and Angie have?

Accepted Answer

A)   $330,000
B)   $445,000
C)   $110,000
D)   $525,000

Question 11

A shift in income distribution from wealthy individuals to poor individuals is likely to

Accepted Answer

A)   increase consumer debt.
B)   increase the national propensity to consume.
C)   leave the national propensity to consume unchanged.
D)   decrease the national propensity to consume.

Question 12

Describe how consumption behaves over the business cycle.
-Why does the ratio of consumer debt to income rise during the average expansion?

Accepted Answer

The answer of Describe how consumption behaves over the business...

Question 13

At very low levels of income, consumer spending is likely to

Accepted Answer

A)   be less than income
B)   be greater than income
C)   be the same as income
D)   be the same as savings.

Question 14

Describe how consumption behaves over the business cycle.
-Define average propensity to consume, average propensity to save, marginal propensity to consume, marginal propensity to save.

Accepted Answer

Consumption behavior over the business c...

Question 15

The term, "dis-saving" means

Accepted Answer

A)   having no respect for savings.
B)   drawing money out of savings.
C)   putting money into savings.
D)   not saving at all. B

Question 16

Describe how consumption behaves over the business cycle.
-Why does a decline in the labor share cause a decline in the propensity to consume for the average of all consumers?

Accepted Answer

The answer of Describe how consumption behaves over the business...

Question 17

What is the wealth effect?

Accepted Answer

A)   the tendency for many individuals to copy the consumption patterns of the wealthy.
B)   the tendency for increases in wealth to lead to increases in savings.
C)   the tendency for increases in wealth to lead to increases in consumption.
D)   the tendency for the wealthy to willingly share their good fortune with the less well off.

Question 18

Whats defention of terms:
-savings

Accepted Answer

The answer of Whats defention of terms:
-savings...

Question 19

Explain how consumption has grown over the long run.
-How does wealth and debt affect spending?

Accepted Answer

The answer of Explain how consumption has grown over the...

Question 20

Whats defention of terms:
-average propensity to save

Accepted Answer

The answer of Whats defention of terms:
-average propensity to save...

Exam 42: Consumer Spending and Labor Income

Compare and discuss determinants of aggregate consumption. -How does aggregate consumption behave over the business cycle?

Correct Answer
verified
Consumption rises during expansions but more slowly than income During contractions, consumption is relatively flat

Whats defention of terms: -dis-saving

Correct Answer
verified

Whats defention of terms: -consumption function

Correct Answer
verified

The wealthy tend to have

Correct Answer
verified

Diagram 42a -Diagram 42a indicates that

Correct Answer
verified

Why consumers tend to purchase less if they have less wealth (or more debt) , even if their income remains constant?

Correct Answer
verified
C

Diagram 42a -Diagram 42a indicates that

Correct Answer
verified

Keynes believed that consumer demand in the aggregate is determined primarily by

Correct Answer
verified

Compare and discuss determinants of aggregate consumption. -Why do people purchase less if they have less wealth, even if their income remains constant?

Correct Answer
verified

Correct Answer
verified

A shift in income distribution from wealthy individuals to poor individuals is likely to

Correct Answer
verified

Describe how consumption behaves over the business cycle. -Why does the ratio of consumer debt to income rise during the average expansion?

Correct Answer
verified

At very low levels of income, consumer spending is likely to

Correct Answer
verified

Describe how consumption behaves over the business cycle. -Define average propensity to consume, average propensity to save, marginal propensity to consume, marginal propensity to save.

Correct Answer
Answered by ExamLex AI
Consumption behavior over the business c...
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The term, "dis-saving" means

Correct Answer
verified
B

Describe how consumption behaves over the business cycle. -Why does a decline in the labor share cause a decline in the propensity to consume for the average of all consumers?

Correct Answer
verified

What is the wealth effect?

Correct Answer
verified

Whats defention of terms: -savings

Correct Answer
verified

Explain how consumption has grown over the long run. -How does wealth and debt affect spending?

Correct Answer
verified

Whats defention of terms: -average propensity to save

Correct Answer
verified

Exam 42: Consumer Spending and Labor Income

Compare and discuss determinants of aggregate consumption. -How does aggregate consumption behave over the business cycle?

Correct AnswerverifiedConsumption rises during expansions but more slowly than income During contractions, consumption is relatively flat

Whats defention of terms: -dis-saving

Correct AnswerverifiedShow Answer

Whats defention of terms: -consumption function

Correct AnswerverifiedShow Answer

The wealthy tend to have

Correct AnswerverifiedShow Answer

Diagram 42a -Diagram 42a indicates that

Correct AnswerverifiedShow Answer

Why consumers tend to purchase less if they have less wealth (or more debt) , even if their income remains constant?

Correct AnswerverifiedC

Diagram 42a -Diagram 42a indicates that

Correct AnswerverifiedShow Answer

Keynes believed that consumer demand in the aggregate is determined primarily by

Correct AnswerverifiedShow Answer

Compare and discuss determinants of aggregate consumption. -Why do people purchase less if they have less wealth, even if their income remains constant?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A shift in income distribution from wealthy individuals to poor individuals is likely to

Correct AnswerverifiedShow Answer

Describe how consumption behaves over the business cycle. -Why does the ratio of consumer debt to income rise during the average expansion?

Correct AnswerverifiedShow Answer

At very low levels of income, consumer spending is likely to

Correct AnswerverifiedShow Answer

Describe how consumption behaves over the business cycle. -Define average propensity to consume, average propensity to save, marginal propensity to consume, marginal propensity to save.

Correct AnswerAnswered by ExamLex AIConsumption behavior over the business c...View AnswerShow Answer

The term, "dis-saving" means

Correct AnswerverifiedB

Describe how consumption behaves over the business cycle. -Why does a decline in the labor share cause a decline in the propensity to consume for the average of all consumers?

Correct AnswerverifiedShow Answer

What is the wealth effect?

Correct AnswerverifiedShow Answer

Whats defention of terms: -savings

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Explain how consumption has grown over the long run. -How does wealth and debt affect spending?

Correct AnswerverifiedShow Answer

Whats defention of terms: -average propensity to save

Correct AnswerverifiedShow Answer

Correct Answer
verified
Consumption rises during expansions but more slowly than income During contractions, consumption is relatively flat

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Consumption behavior over the business c...
View Answer

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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