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Assume a model with no government, where consumption is the only component of aggregate demand. If the consumption function is of the form C = 400 + (0.9)Y, what is the equilibrium level of consumption?

A. 400
B. 1
C. 1600
D. 3600
E. 4000

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Assume a model of the expenditure sector with no government or foreign sector. If the savings function is defined as S = - 300 + (0.1)Y and autonomous investment increases by 200, by how much will consumption increase?

A. 180
B. 200
C. 1800
D. 2000
E. 2100

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The reason that an increase in autonomous spending leads to an even greater increase in equilibrium level of output is that

A. as firms increase output to meet demand, income increases, and this induces more consumption spending
B. the multiplier increases with an increase in autonomous spending
C. prices rise with increased output and this raises nominal GDP
D. people save less as their income increases
E. there is unwanted inventory accumulation, leading firms to lower prices and encouraging increased consumer spending

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Assume a simple model with no government or foreign sector. If an increase in autonomous investment of 100 leads to an increase in consumption of 300, the size of the expenditure multiplier is

A. 0.75
B. 1.33
C. 3
D. 4
E. 5

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Generally speaking, the effect on income resulting from a change in investment spending is greater if

A. the average propensity to consume is smaller
B. the marginal propensity to consume is smaller
C. the marginal propensity to save is smaller
D. the marginal propensity to save is larger
E. the average propensity to save is larger

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Assume a model with no government, where consumption is the only component of aggregate demand. If the consumption function is of the form C = 400 + (0.9)Y, what is the equilibrium level of consumption?

A. 400 B. 1 C. 1600 D. 3600 E. 4000

Assume a model of the expenditure sector with no government or foreign sector. If the savings function is defined as S = - 300 + (0.1)Y and autonomous investment increases by 200, by how much will consumption increase?

The reason that an increase in autonomous spending leads to an even greater increase in equilibrium level of output is that

Assume a simple model with no government or foreign sector. If an increase in autonomous investment of 100 leads to an increase in consumption of 300, the size of the expenditure multiplier is

Generally speaking, the effect on income resulting from a change in investment spending is greater if

A. 400
B. 1
C. 1600
D. 3600
E. 4000