Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 5WNG
To determine
The upward sloping of the total expenditure curve as the consumption function is upward sloping.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Using the Keynesian-cross diagram, the investment function diagram, and the IS Curve, illustrate what happens when consumer confidence falls (thus reducing autonomous consumptions. (See page 319 of the textbook.)
The aggregate consumption function will shift upward if, all other things remaining the same,
the marginal propensity to consume decreases.
None of the choices given are correct
the marginal propensity to save increases.
disposable incomes increase
If the marginal propensity to consume increases, that will:
Shift the consumption function downwards
Lead to the consumption function becoming flatter
Shift the consumption function upwards
Lead to the consumption function becoming steeper
Chapter 10 Solutions
Economics (MindTap Course List)
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 - Prob. 21QPCh. 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 - In the accompanying figure, explain what happens...Ch. 10 - Prob. 8WNG
Knowledge Booster
Similar questions
- Multiple choice If the marginal propensity to consume increases: (1) The slope of the consumption function will be steeper;(2) There will be a movement from left to right along the consumption function;(3) The consumption function will shift parallel upwards;(4) The consumption function will shift parallel downwards.arrow_forwardA decrease in autonomous consumption will 1) shift the aggregate expenditure function downward. 2) decrease the marginal propensity to save. 3) shift the consumption function upward. 4) change the slope of the consumption function.arrow_forwardWhich of the following features of a Keynesian consumption function is not true? a. In the short run, current disposable income has the most impact on consumption. b. As income rises, so does the average tendency to consume. c. the average tendency to consume decreases as income increases decrease d .The marginal consumption propensity is smaller than one.arrow_forward
- If consumption is $8 billion when disposable income is $0, and if the marginal propensity to consume is 0.60, find the national consumption function C(y) (in billions of dollars).arrow_forwardAn increase in the interest rate would shift the consumption function upward. True or Falsearrow_forwardUsing the Keynesian-cross diagram and the investment function diagram, derive the IS Curve by illustrating what happens when real interest rates fall. (See page 319 of the textbook for an example.)arrow_forward
- In the simple Keynesian consumption function C = 84 +0.83*Y^d, what is the marginal propensity to consume (MPC) equal to?arrow_forwardIn the Keynesian cross, the economy is in equilibrium when planned expenditure equals actual expenditure. However, when planned expenditure exceeds actual expenditure, unplanned inventory investment is ________, causing output to ________. a. negative; fall b. positive; fall c. positive; rise d. negative; risearrow_forwardExplain the Keynesian, saving-consumption relationship, and interpret consumption and saving functions on a single graph.arrow_forward
- If investment spending is not very sensitive to the interest ratea. the LM curve should be relatively flat.b. the LM curve should be relatively steep.c. the IS curve should be relatively flat.d. the IS curve should be relatively steep.e. neither the IS nor the LM curve will be affected. Explain..arrow_forwardWhich of the following will cause the planned aggregate expenditure function to shift down? Group of answer choices A rise in the marginal propensity to consume. A rise in the marginal propensity to save. A rise in interest rate. A rise in government transfer payments.arrow_forwardIn the Keynesian cross model, assume that the consumption function is given by C = 100 + 0.75(Y - T). If government spending increases by AG = 100, what is the increase in output? How does your answer change when the spending increase is financed by an equal increase in taxes?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc