The nation has its own MPC. When disposable income increases from 300 billion to 400 billion, national consumption increases from 300 billion to 360 billion. At Y = 400 billion, the MPC is:
a. 0.2.
b. 0.5.
c. 0.6.
d. 0.67.
e. 1.33.
QUESTION 2The sum of past federal budget deficits increases the:
a. GDP debt.
b. trade debt plus debt.
c. national debt.
d. Congressional debt.
QUESTION 3When the value of our goods exports is less than the value of our goods imports,
a. d and e.
b. the value of the dollar must fall.
c. there will be domestic unemployment.
d. there will be an unfavorable balance of trade.
e. foreign currency reserves must fall.
QUESTION 4The change in consumption divided by a change in disposable income is defined as:
a. the marginal propensity to consume.
b. autonomous consumption.
c. the consumption function.
d. Keynes' absolute disposable income hypothesis.
e. transitory consumption.
QUESTION 5With regard to the national debt, to whom does the federal government owe money?
a. Taxpayers.
b. Federal government workers.
c. The Federal Reserve System.
d. Investors who buy U.S. Treasury bills, bonds, and notes.
QUESTION 6If goods imports are greater than goods exports, the nation is experiencing a:
a. negative balance on current account.
b. goods trade deficit.
c. capital account imbalance.
d. weakening of its currency.
e. growth in foreign reserves.
QUESTION 7If your disposable personal income increases from 40,000 to 48,000 and your consumption increases from 35,000 to 39,000 . your marginal propensity to consume (MPC) is:
a. 0.20.
b. 0.40.
c. 0.50.
d. 0.80.
e. 1.00.
QUESTION 8If the federal government has a budget surplus, then the national debt is:
a. reduced.
b. fully repaid.
c. negative.
d. interest-free.
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