The average propensity to consume (APC) equals the change in real disposable inc
ID: 1205300 • Letter: T
Question
The average propensity to consume (APC) equals
the change in real disposable income divided by the change in consumption expenditures.
the change in consumption expenditures divided by the change in real disposable income.
real disposable income divided by consumption expenditures.
consumption expenditures divided by real disposable income.
The consumption function shows how much
households plan to consume per year at each level of real disposable income.
households plan to consume per year at each level of savings.
households plan to consume per year at each possible interest rate.
real disposable income people will earn at each income tax bracket.
Saving is
the accumulation of past periods of savings while savings is the amount of disposable income that is not consumed in a given period of time.
the amount one does not consume in a given period of time while savings is the accumulation of past periods of saving.
the difference between disposable income and spending on goods and services while savings is the difference between real GDP and disposable income.
the difference between real GDP and disposable income while savings is the difference between disposable income and consumption spending.
Thinking as an economist would, which is true of investment?
Investment represents spending on capital goods.
Investment is a stock concept.
Investment is putting money into stocks and bonds.
It is the portion of disposable income that is not used for consumption or saving.
An appreciation of the U.S. dollar ________ the price of U.S. imports, and ________ the price of U.S. exports.
lowers, lowers
increases, increases
increases, lowers
lowers, increases
QUESTION 33
Other things being equal, if input prices rise in a country, then there would be
cost-push inflation.
demand-pull inflation.
cost-push deflation.
more production and a lower price level.
the change in real disposable income divided by the change in consumption expenditures.
the change in consumption expenditures divided by the change in real disposable income.
real disposable income divided by consumption expenditures.
consumption expenditures divided by real disposable income.
The consumption function shows how much
households plan to consume per year at each level of real disposable income.
households plan to consume per year at each level of savings.
households plan to consume per year at each possible interest rate.
real disposable income people will earn at each income tax bracket.
Saving is
the accumulation of past periods of savings while savings is the amount of disposable income that is not consumed in a given period of time.
the amount one does not consume in a given period of time while savings is the accumulation of past periods of saving.
the difference between disposable income and spending on goods and services while savings is the difference between real GDP and disposable income.
the difference between real GDP and disposable income while savings is the difference between disposable income and consumption spending.
Thinking as an economist would, which is true of investment?
Investment represents spending on capital goods.
Investment is a stock concept.
Investment is putting money into stocks and bonds.
It is the portion of disposable income that is not used for consumption or saving.
An appreciation of the U.S. dollar ________ the price of U.S. imports, and ________ the price of U.S. exports.
lowers, lowers
increases, increases
increases, lowers
lowers, increases
QUESTION 33
Other things being equal, if input prices rise in a country, then there would be
cost-push inflation.
demand-pull inflation.
cost-push deflation.
more production and a lower price level.
Explanation / Answer
1) Average propensity to consume (APC) summarizes the relationship between personal consumption and disposable personal income. It is the proportion of total disposable income that is spent on consumption.
Hence, the correct option is D
2) Consumption function exhibits a relationship between consumption and disposable income. It is the amount of consumption that the households plan to consume per year at each level of real disposable income.
Hence, the correct option is A.
3) Saving is the the amount one does not consume in a given period of time while savings is the accumulation of past periods of saving.
Hence the correct option is B
4) Investment is the purchase of new capital including machines, spending plants etc. So it represents spending on capital goods.
Henec the correct option is A
5) An appreciation of the U.S. dollar makes imports cheaper and exports expensive, therefore it decreases the price of U.S. imports, and increases the price of U.S. exports.
So the correct option is D
6) It is cost-push inflation when the inflation causes the unemployment rate to surpass the natural rate of unemployment due a rise in input prices or cost of production.
Hence the correct option is A
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