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Increase in the propensity to consume

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Reference no: EM131253764

1. An increase in the propensity to consume will___________.

A. raise equilibrium output in the short run.

B. increase the demand for output.

C. raise consumption spending.

D. all of the above.

2. For an equilibrium condition to occur in the goods market, ___________.

A. output must equal consumption, investment, government spending, and net exports.

B. output must equal consumption and investment.

C. consumption must equal investment.

D. consumption must equal investment and government spending.

3. Suppose that the economy is characterized by the following behavioral equations: C = 160 + 0.6Yd,I = 150,T = 100. Assume that government spending (G) is equal to 110. Equilibrium output (Y) = __________. (Round your response to the nearest integer.)

Reference no: EM131253764

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