**question 3**

For a given nation, suppose the table shows the relationship between real consumption and real disposable income (real GDP):

If the investment schedule is $60 at each level of output, the equilibrium level of real GDP will be (a) $320 (b) $360 (c) $400 (d) $440

For a given nation, suppose the table shows the relationship between real consumption and real disposable income (real GDP):

- What is the value of the average propensity to consume at $200 real GDP?
- What is the value of the average propensity to consume at $400 real GDP?
- What is the value of the average propensity to save at $200 real GDP?
- What is the value of the average propensity to save at $400 real GDP?
- What is the value of the marginal propensity to consume?
- What is the value of the marginal propensity to save?
- If this nation consumes $50 more at each level of real GDP than shown in the table, is this a SHIFT in the consumption function or a MOVEMENT ALONG the consumption function?
- If the nation’s level of real GDP decreases from $440 to $280, is this a SHIFT in the consumption function or a MOVEMENT ALONG the consumption function?
- Compute the value of the Keynesian spending multiplier.
- Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in investment expenditures.
- Give the amount of the change in the equilibrium level of Real GDP due to a $4 decrease in consumption expenditures.
- Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in investment expenditures.
- Give the amount of the change in the equilibrium level of Real GDP due to a $4 decrease in consumption expenditures and a $6 increase in investment expenditures at the same time.
- Suppose the equilibrium level of Real GDP decreases by $20. What was the amount of the change in autonomous expenditures which caused this to happen?
- none
- none
- Use shifts of the AD and AS curves to explain the cost-push inflation of the 1970s.
- What is the mathematical term to describe the relationship between real consumption and real GDP?
- What is the mathematical term to describe the relationship between real saving and real GDP?
- What happens to the value of the APC as real GDP decreases?
- What happens to the value of the APS as real GDP decreases?
- APC + APS = MPC + MPS: TRUE OR FALSE?
- Briefly summarize Say’s Law.
- Briefly summarize the Classical view of how the economy works.
- What historical event caused a change in thinking about the way the economy works?
- Briefly summarize the Keynesian view of how the economy works.
- What is the difference between the investment demand curve for a business and the investment schedule for an economy?
- What is the difference between the equilibrium level of real GDP and the full-employment level of real GDP in the Keynesian model?