Macroeconomics Fall 2008: Quiz # 3.: 100 points
10 points 1. The most important determinant of consumer spending is:
the level of household debt.
consumer expectations.
the stock of wealth.
the level of income.
10 points 2. With an MPS of .4, the MPC will be:
1.0 minus .4.
.4 minus 1.0.
the reciprocal of the MPS.
.4.
10 points 3. The 45-degree line on a graph relating consumption and income shows:
all points where the MPC is constant.
all points at which saving and income are equal.
all the points at which consumption and income are equal.
the amounts households will plan to save at each possible level of
income.
10 points 4. A decline in disposable income:
increases consumption by moving upward along a specific consumption
schedule.
decreases consumption because it shifts the consumption schedule
downward.
decreases consumption by moving downward along a specific
consumption schedule.
increases consumption because it shifts the consumption schedule
upward.
10 points 5. If the MPC is .8 and disposable income is $200, then:
