Krugman's Economics for AP

Margaret Ray

Chapter 16 Income and Expenditure - all with Video Answers

Educators

Chapter Questions

Problem 1

Changes in which of the following leads to a shift of the aggregate consumption function?
I. expected future disposable income
II. aggregate wealth
III. current disposable income
a. I only
b. II only
c. III only
d. I and II only
e. I, II, and III

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00:48

Problem 2

The slope of a household's consumption function is equal to
a. the real interest rate.
b. the inflation rate.
c. the marginal propensity to consume.
d. the rate of increase in household current disposable income.
e. the tax rate.

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Problem 3

Given the aggregate consumption function $$C=\$ 1.6$$ trillion $+0.5 Y_D$, if aggregate current disposable income is $$\$ 2.0$$ trillion, aggregate consumption spending will equal
a. $$\$ 3.6$$ trillion.
b. $$\$ 2.6$$ trillion.
c. $$\$ 2.0$$trillion.
d. $$\$ 1.6$$ trillion.
e. $$\$ 0.6$$ trillion.

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01:22

Problem 4

The level of planned investment spending is negatively related to
a. the rate of return on investment.
b. the level of consumer spending.
c. the level of actual investment spending.
d. the interest rate.
e. all of the above.

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01:22

Problem 5

Actual investment spending in any period is equal to
a. planned investment spending + unplanned inventory investment.
b. planned investment spending - unplanned inventory investment.
c. planned investment spending + inventory decreases.
d. unplanned inventory investment + inventory increases.
e. unplanned inventory investment - inventory increases.

Doris Bennett

Numerade Educator