ECON Chapter 9-10 – Flashcards

The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All figures are in billions of dollars. If plotted on a graph, the slope of the consumption schedule would be:

The full-time homemakers and retirees are classified in the BLS data as:

The investment demand slopes downward and to the right because lower real interest rates:

The multiplier can be calculated by dividing:

The nominal rate of interest is 8.5 percent and the real rate is 5 percent. The expected rate of return on an investment is 8 percent. The firm should:

The relationship between the real interest rate and investment is shown by the:

When oil and energy prices rise, the economy tends to experience:

When we draw an investment demand curve we hold constant all of the following except:

Which of the following could shift both consumption and saving schedules upward?

Which of the following would shift the investment demand curve to the left?

A downward shift of the consumption schedule might be caused by a(an):

"Full employment" refers to the situation when there is:

A decline in disposable income:

A headline states: "Real GDP falls again as the economy slumps." This condition is most likely to produce what type of unemployment?

A person's real income will increase by 2% if her nominal income:

A recession is a decline in:

A trough in the business cycle occurs when:

A worker who loses a job at a call center because business firms switch the call center to another country is an example of:

At the point where the consumption schedule intersects the 45-degree line:

Capital goods, because their purchases can be postponed like ______ consumer goods, tend to contribute to ________ in investment spending.

If Carol's disposable income increases from $1,000 to $1,600 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to:

If a lump-sum tax of $40 billion is levied at each level of income and the MPC is 0.75, then the consumption schedule will shift:

If consumers expect prices to rise and shortages to occur in the future, then it will shift:

If the Consumer Price Index was 110 in one year and 118 in the next year, then the rate of inflation is approximately:

If the MPC in an economy is 0.8 and government expenditures increase by $5 billion, then GDP will increase by:

If the negative GDP gap were equal to 5% of the potential GDP, Okun's law suggests that the actual unemployment rate would exceed the natural rate of unemployment by:

If the slope of the consumption schedule is 0.7, MPC must be :

In calculating the unemployment rate, "discouraged" workers who are not actively seeking employment are:

In contrast to investment, consumption is:

In the late 1990s the U.S. stock market boomed, causing U.S. consumption to rise. Economists refer to this outcome as the:

The GDP gap measures the difference:

The MPC can be defined as the fraction of a: