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1 | |
Today Americans spend _______ of their disposable incomes |
| | A) | about half |
| | B) | about three-quarters |
| | C) | about nine-tenths |
| | D) | nearly all |
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2 | |
If you added a country's average propensity to consume and its average propensity to save you
would get a sum of |
| | A) | less than 1. |
| | B) | more than 1. |
| | C) | 1. |
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3 | |
As a country's marginal propensity to consume goes down, its marginal propensity to save |
| | A) | also goes down. |
| | B) | stays the same. |
| | C) | goes up. |
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4 | |
Consumption is a function of |
| | A) | saving. |
| | B) | disposable income. |
| | C) | consumption. |
| | D) | taxation. |
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5 | |
When disposable income rises, |
| | A) | induced consumption rises. |
| | B) | autonomous consumption rises. |
| | C) | induced consumption and autonomous consumption both rise. |
| | D) | neither induced consumption nor autonomous consumption rise. |
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6 | |
Which statement is true? |
| | A) | Consumers spend a greater percentage of their disposable incomes on consumer durables than they did 50 years ago. |
| | B) | Consumers spend more on services than they do on durables and nondurables combined. |
| | C) | In recent years, consumers have spent a declining percentage of their incomes on services. |
| | D) | During a recession, spending on services falls much more sharply than spending on durables. |
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7 | |
The level of consumption tends to rise as the stock of liquid assets in the hands of consumers goes _____ and as the stock of durable goods in the hands of consumers goes ______.
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| | A) | up, up |
| | B) | down, down |
| | C) | up, down |
| | D) | down, up |
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8 | |
Among the leading industrial nations, the United States savings rate would rank |
| | A) | at the top. |
| | B) | near the top. |
| | C) | in the middle. |
| | D) | at or near the bottom. |
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9 | |
Conspicuous consumption |
| | A) | was a phrase coined by Thorstein Veblen. |
| | B) | is what is meant by the phrase "keeping up with the Joneses." |
| | C) | is a way the wealthy, among others, advertise their wealth. |
| | D) | was written about in The Theory of the Leisure Class. |
| | E) | all of the above |
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10 | |
Since the early 1980s our APS has |
| | A) | increased substantially. |
| | B) | increased slightly. |
| | C) | stayed about the same. |
| | D) | decreased slightly. |
| | E) | decreased substantially. |
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11 | |
If the APC is .8, we save |
| | A) | 2 percent of our income. |
| | B) | 8 percent of our income. |
| | C) | 20 percent of our income. |
| | D) | 80 percent of our income. |
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12 | |
Milton Friedman's "permanent income hypothesis" |
| | A) | is borne out by the consumption patterns of lottery winners. |
| | B) | states that consumption depends on our expected income stream over time. |
| | C) | is the consumption function. |
| | D) | has no validity. |
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13 | |
Which statement is false? |
| | A) | Our savings rate may not have been so low were it not for Social Security. |
| | B) | Widespread home ownership has lowered our savings rate. |
| | C) | The availability of home equity loans has reduced our savings rate. |
| | D) | None is false. |
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14 | |
Autonomous consumption is______ zero. |
| | A) | always |
| | B) | usually |
| | C) | sometimes |
| | D) | never |
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15 | |
When the APS is negative, the APC is |
| | A) | negative. |
| | B) | less than 1. |
| | C) | 1. |
| | D) | more than 1. |
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2002 McGraw-Hill Higher Education