In a model with no government or foreign sector, if saving is defined as S = - 200 + (0.1)Y and investment is Io = 200, what is the equilibrium level of consumption?
A. 3800
B. 3600
C. 1800
D. 2000
E. 1000
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In a model with no government or foreign sector, if autonomous consumption is Co = 80, investment is Io = 70, and the marginal propensity to save is s = 0.25, equilibrium income is
A. 150
B. 200
C. 225
D. 600
E. 750
The expenditure multiplier measures
A. the number of steps it takes to move from one equilibrium to another
B. the rise in saving resulting from a rise in income
C. the change in investment resulting from a change in income
D. the change in induced consumption caused by a change in income
E. none of the above
When calculating the multiplier for government purchases (G), we
A. must know the marginal propensity to save (mps)
B. must know the income tax rate (t)
C. must know the average propensity to consume (apc)
D. can ignore the size of the marginal propensity to consume (mpc)
E. both A) and B)
The size of the expenditure multiplier
A. changes with a change in investment spending
B. increases as the mps increases
C. increases as the mps decreases
D. increases as the income tax rate increases
E. varies with the apc
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