Question : 51) Jack Nelson, a supervisor in the hardware department at : 1227965

51) Jack Nelson, a supervisor in the hardware department at Sears, received a $3,000 increase in his annual disposable income. Suppose his marginal propensity to consume is 0.80. How much of the $3,000 increase will Jack spend on consumption?

A) $2,750

B) $2,500

C) $2,400

D) $2,200

E) $3,000

52) If your MPC is 0.5, then when your disposable income increases by $100, your consumption expenditure increases by

A) $5.

B) $200.

C) $100.

D) $50.

E) $95.

53) If the marginal propensity to consume is ________, then a $2 trillion increase in disposable income increases consumption expenditure by $1.2 trillion. If the marginal propensity to consume is ________, then a $2 trillion increase in disposable income increases consumption expenditures by $1.6 trillion.

A) 0.6; 0.8

B) 1.2; 1.6

C) 1.67; 2.25

D) 6.0; 8.0

E) None of the above because a $2 trillion increase in disposable income always leads to a $2 trillion increase in consumption expenditure.

54) The above table has data from the nation of Media. Based on these data, when disposable income is $8.0 trillion, saving is

A) -$0.5 trillion.

B) -$1.5 trillion.

C) $0.5 trillion.

D) $1.5 trillion.

E) $7.5 trillion.

55) The above table has data from the nation of Media. Based on these data, the marginal propensity to consume is

A) 0.25.

B) 0.67.

C) 0.75.

D) 1.33.

E) 1.50.

56) When the real interest rate falls, the consumption function

A) shifts upward.

B) does not shift and there is no movement along the consumption function.

C) shifts downward.

D) does not shift and there is a movement upward along the consumption function.

E) does not shift and there is a movement downward along the consumption function.

57) When the real interest rate falls, there is

A) an increase in the slope of the consumption function.

B) an upward shift of the consumption function.

C) a downward shift of the consumption function.

D) a decrease in the slope of the consumption function.

E) a movement upward along the consumption function.

58) When the real interest rate rises, there is

A) an upward movement along the consumption function.

B) a downward movement along the consumption function.

C) an upward shift of the consumption function.

D) a downward shift of the consumption function.

E) neither a shift of the consumption function or a movement along the consumption function.

59) If the real interest rate increases, there is

A) a movement upward along the consumption function.

B) a movement downward along consumption function.

C) an upward shift of the consumption function.

D) a downward shift of the consumption function.

E) a change in the slope of the consumption function.

60) A rise in the real interest rate ________ consumption expenditure and ________.

A) increases; shifts the consumption function upward

B) decreases; shifts the consumption function downward

C) increases; shifts the consumption function downward

D) decreases; shifts the consumption function upward

E) decreases; results in a movement downward along the consumption function