Quiz 10

Question 1

The most important determinant of consumption and saving is the

Answer 1

Level of Income

Question 2

What is the term from the level of disposable income at which households plan to consume (spend) all their income and to save money of it?

Answer 2

Break-even Income

Question 3

With a marginal propensity to save 0.4, the marginal propensity to consume will be

Answer 3

1.0 minus 0.4

Question 4

The 45-degree on a graph relating consumption and income shows

Answer 4

All the points at which consumption and income are equal

Question 5

APC is calculated as

Answer 5

Consumption divided by Income

Question 6

The consumption schedule indicates as

Answer 6

Up to a point, consumption exceeds income but then falls below income

Question 7

As disposable income increases, consumption -

Answer 7

And saving both increases

Question 8

Which shows consumption schedules for economic A and B. We can say that -

Answer 8

MPC is greater in A than in B

Question 9

Dissaving means -

Answer 9

That households are spending more than their current incomes

Question 10

In the late 1990s, the US stock market boomed, causing US consumption to rise. Economists refer to this outcome as the -

Answer 10

Wealth effect