AP Macro Ch 8-

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The conusumption schedule shows the various amounts that households plan to (save, consume) _____ at various levels of disposable income, and the saving schedule shows the various amounts that households plan to ____.

consume, save

Both consumption and saving are (directly, indirectly) _______ related to the level of disposable income. At lower levels of disposable income, households tend to spend a (smaller, larger) _____ proportion of this income and save a ________ proportion, but at higher levels, they tend to spend a _____ proportion and save a ____ proportion. At the break-even income, consumption is (greater than, less than, equal to) _____ disposable income.

directly, larger, smaller, smaller, larger, equal to

As disposable income falls, the APC will (rise, fall) _____ and the APS will _____.

rise, fall

The sum of APC and APS is equal to (0, 1) _____.

1

The MPC is the change in (consumption, income) _______ divided by the change in _______.

consumption, income

The MPS is the change in (saving, income) ______ divided by the change in _____.

saving, income

The sum of MPC and MPS is equal to (0, 1) _____

1

The MPC is the numerical value of the slope of the (consumption, saving) ______ schedule, and the MPS is the numerical value of the slope of the _____ schedule.

consumption, saving

The most inmportant determinants of consumption spending, other than the level of income, are:
a. ______
b. _____
c. ______
d. _____
e. _____

wealth, expectations, taxation, household debt, real interest rate

An increase in the consumption schedule means that the consumption schedule shifts (upward, downward) ____ and a decrease in the consumption schedule means that it will shift ______, and these shifts occur because of a change in one of the nonincome determinants. An increase in the amount consumed occurs because of an increase in (income, stability) _____.

upward, downward, income

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