Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 10, Problem 15QP
To determine
The impact of increased savings and decreased interest rate on the economy.
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Students have asked these similar questions
According to Keynes, wealth or credit is a factor that affects consumption. An example of wealth is A,B,C,OR D one answer
a
an increase in expected future income.
b
a decline in interest rates.
c
an increase in economic output.
d
an increase in the value of stock
In the simple Keynesian model, if aggregate expenditure is less than GDP, output will
a)decline as firms increase their prices to stop the buildup of inventories
b)increase as firms increase production to try to stop depletion of inventories
c)remain unchanged indefinitely unless government takes action
d)increase as firms cut their prices to try to stop depletion of inventories
e)decline as firms cut production to stop the buildup of inventories
Which of the following correctly describes how a decrease in the price level affects consumption spending?
Select one:
a. A decrease in the price level raises real wealth, which causes consumption to increase.
b. A decrease in the price level decreases the amount of money a household needs to buy goods and so raises the interest rate, which causes consumption to increase.
c. A decrease in the price level increases the amount of money a household needs to buy goods and so raises the interest rate, which causes consumption to increase.
d. A decrease in the price level lowers real wealth, which causes consumption to decrease.
Chapter 10 Solutions
Macroeconomics
Ch. 10.1 - Prob. 1STCh. 10.1 - Prob. 2STCh. 10.1 - Prob. 3STCh. 10.2 - Prob. 1STCh. 10.2 - Prob. 2STCh. 10.2 - Prob. 3STCh. 10.3 - Prob. 1STCh. 10.3 - Prob. 2STCh. 10.3 - Prob. 3STCh. 10.4 - Prob. 1ST
Ch. 10.4 - Prob. 2STCh. 10 - Prob. 1QPCh. 10 - Prob. 2QPCh. 10 - Prob. 3QPCh. 10 - Prob. 4QPCh. 10 - Prob. 5QPCh. 10 - Prob. 6QPCh. 10 - Prob. 7QPCh. 10 - Prob. 8QPCh. 10 - Prob. 9QPCh. 10 - Prob. 10QPCh. 10 - Prob. 11QPCh. 10 - Prob. 12QPCh. 10 - Prob. 13QPCh. 10 - Prob. 14QPCh. 10 - Prob. 15QPCh. 10 - Prob. 16QPCh. 10 - Prob. 17QPCh. 10 - Prob. 18QPCh. 10 - Prob. 19QPCh. 10 - Prob. 20QPCh. 10 - Explain how to derive a total expenditures (TE)...Ch. 10 - Prob. 22QPCh. 10 - Prob. 23QPCh. 10 - Prob. 24QPCh. 10 - Prob. 25QPCh. 10 - Prob. 1WNGCh. 10 - Prob. 2WNGCh. 10 - Prob. 3WNGCh. 10 - Prob. 4WNGCh. 10 - Prob. 5WNGCh. 10 - Prob. 6WNGCh. 10 - Prob. 7WNGCh. 10 - Prob. 8WNG
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Similar questions
- Keynes stipulated that there are two determinants of investment. They are A,B,C, OR D ONE ANSWER A disposable income and wealth. B expected future profits and interest rates. C price and quantity. D interest rates and labor cost.arrow_forwardExplain the Keynesian, saving-consumption relationship, and interpret consumption and saving functions on a single graph.arrow_forwardAccording to Keynes, when the price level rises, it causes the interest rate to do what? It causes the level of business spending to do what? a. It causes a decrease in the interest rate, as people adjust to higher prices and purchase less; business spending decreases as well. b. It causes a decrease in the interest rate, as people adjust to higher prices and purchase less; business spending goes up. c. It causes an increase in the interest rate, due to greater consumer demand for money to spend; business spending goes up as well. d. It causes an increase in the interest rate, due to a greater consumer demand for money to spend; business spending decreases.arrow_forward
- Explain the relationship between consumption and saving in the Keynesian model.arrow_forwardHow would an increase in the interest rate affect consumption and investment function?arrow_forwardWhen consumers’ expect that future prices will increase, it is expected that current consumption increases, but future consumption decreases. current consumption decreases, but future consumption increases. current consumption increases, and future consumption also increases. current consumption decreases, while future consumption also decreases.arrow_forward
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