The fraction of change in income that is consumed or spend is called ?

A. The marginal propensity of expenditure
B. The marginal propensity to save
C. The average propensity to consume
D. The marginal propensity to consume

Keynes suggested that decisions to consume and save were based on ?

A. Previous decisions
B. Absolute income
C. Relative income
D. Permanent income

As the MPS increases the multiplier will ?

A. Decrease
B. Remain constant
C. Increase
D. Either increase or decrease depending on the size of the change in investment

Open Market Operations occur when the government ?

A. Reduces the interest rate
B. Buys and sells bonds and securities
C. Increases taxation
D. Increase the exchange rate

A variable whose value is determined by the model of which it is a part is termed ?

A. Exogenous
B. Constant
C. Endogenous
D. Independent

A fall in interest rates is likely to ?

A. Increase aggregate demand
B. Increase savings
C. Decrease consumption
D. Decrease exports

A reduction in the money supply is likely to ?

A. Reduce the interest rate
B. Increase the interest rate
C. Increase inflation
D. Decrease deflation

The speculative demand for money occurs when ?

A. Individuals hold money just in case an emergency happens
B. Individuals hold money to buy things
C. Individuals hold money rather than other assets because they are worried about the price of the other assets falling
D. Individuals hold money to shop

Investment is ?

A. An injection that increases aggregate demand
B. A withdrawal that increase aggregate demand
C. An injection that decreases aggregate demand
D. A withdrawal that decrease aggregate

If an increase in investment leads to a bigger increase in national income this called the ?

A. Accelerator
B. Aggregate demand
C. Monetarism
D. Multiplier