Consumption and Savings Quiz

That part of disposal income not spent on consumption is defined as:

• transitory disposable income

• permanent disposable income

• disposal income

• saving

Psychological law of consumption has been given by-----

• J. M. Keynes

• J. S. Duesenberry

• Ando A. Modigliani

• Friedman

The absolute income theory of consumption has been given by-----

• J. M. Keynes

• J. S. Duesenberry

• Ando A. Modigliani

• Friedman

The marginal propensity to consume (MPC) is the slope of the:

• GDP curve

• disposable income curve

• consumption function

• autonomous consumption curve

The marginal propensity to consume (MPC) is computed as the change in:

• consumption divided by the change in savings

• consumption divided by the change in disposable personal income

• consumption divided by the change in GDP

• None of the above

The change in consumption divided by a change in disposable income is defined as:

• the marginal propensity to consume

• autonomous consumption

• the consumption function

• Keynes' absolute disposable income hypothesis

The marginal propensity to save is:

• the change in saving induced by a change in consumption

• (change in S) / (change in Y)

• 1 - MPC / MPC

• (change in Y - bY) / (change in Y)

The marginal propensity to consume measures the ratio of the:

• average amount of our disposable income that we spend

• average amount of our savings that we spend

• change in consumer spending to a change in money holdings

• change in consumer spending to a change in disposable income

The slope of the consumption function is called the:

• autonomous consumption rate

• marginal consumption rate

• average propensity to consume

• marginal propensity to consume

The marginal propensity to consume is:

• the change in disposable income divided by the change in consumption

• consumption spending divided by disposable income

• disposable income divided by consumption spending

• the change in consumption divided by the change in disposable income