Macroeconomics Practice Test - 13: Consumption
Click on the correct option. Text colour will change into green if your chosen option is corret and if it is wrong, it will change into red:
- There is a proportional relationship between consumption and disposable income
- When the APC is the same for all levels of disposable income
- When the consumption function is a straight line through the origin
- When the MPC equals the APC for all levels of disposable income
- All the above
- Changes in subjective or objective factors
- Never affect the consumption function
- Always cause downward shifts of the consumption function
- Always cause upward shifts of the consumption function
- May cause upward or downward shifts of the consumption function
- Keynes considered subjective and objective factors
- Important determinants of consumption
- Unimportant determinants of consumption
- Determinants of investment
- Determinants of business' willingness to supply
- According to the permanent income hypothesis, all increases in
- Permanent income are saved
- Permanent income are consumed
- Transitory income are saved
- Transitory income are consumed
- When current income includes a negative transitory component, relating consumption with current income will produce
- An average propensity to consume that is lower than the long-run average propensity to consume
- An average propensity to consume that is higher than the long-run average propensity to consume
- An average propensity to consume that equals the long-run average propensity to consume
- None of the above
- The permanent income hypothesis is consistent with cross-section and time-series data because
- Higher-income households are savers, since their current income includes positive transitory components
- Higher-income households are savers, since their current income includes negative transitory components
- Lower-income households are savers, since their current income includes negative transitory components
- Lower-income households are dissavers, since their current income includes positive transitory components
- According to the life-cycle hypothesis, consumption is related to
- Current income
- Past peak income
- Expected lifetime income
- Price expectations over one's lifetime
- Suppose a 25-year-old individual expects to earn $25,000 annually until retirement at age 70. When income is spent uniformly during the individual's lifetime and life expectancy is 80, the
- Individual consumes $22,000 a year during the employment years
- Individual's endowment at retirement is $204,545
- Individual saves $4000 a year during the employment years
- Individual's lifetime income is $1.3 million
- Suppose an individual intends to spend income uniformly during her or his lifetime During the employment years, the APC
- Is constant when annual income is unchanged
- Decreases with age when annual income increases during the individual's employment years
- Increase with age when annual income decreases during the individual's employment years
- All the above
- Which of the following best describes the reasons for involuntary bequests?
- Interest rates had increased in recent years
- There was considerable uncertainty associated with expendiures during retirement
- There were substantial gains in the stock market
- Individuals wanted to leave an inheritance to their children
No comments:
Post a Comment