The consumption schedule is such that:

1.   ?    both the APC and the MPC increase as income rises.
2.   ?    the APC is constant and the MPC declines as income rises.
3.   ?    the MPC is constant and the APC declines as income rises.
4.   ?    the MPC and APC must be equal at all levels of income.

The average propensity to consume indicates the:

1.   ?    amount by which income exceeds consumption.
2.   ?    relationship between a change in saving and the consequent change in consumption.
3.   ?    percentage of total income that will be consumed.
4.   ?    percentage of a change in income that will be consumed.

The relationship between consumption and disposable income is such that:

1.   ?    an inverse and stable relationship exists between consumption and income.
2.   ?    a direct, but very volatile, relationship exists between consumption and income.
3.   ?    a direct and quite stable relationship exists between consumption and income.
4.   ?    the two are always equal.

Suppose a family's consumption exceeds of its disposable income. This means that its:

1.   ?    MPC is greater than 1.
2.   ?    MPS is negative.
3.   ?    APC is greater than 1.
4.   ?    APS is positive.

If the equation C = 20 + .6Y , where C is consumption and Y is disposable income, were graphed:

1.   ?    the vertical intercept would be +.6 and the slope would be +20.
2.   ?    it would reveal an inverse relationship between consumption and disposable income.
3.   ?    the vertical intercept would be negative, but consumption would increase as disposable income rises.
4.   ?    the vertical intercept would be +20 and the slope would be +.6.

At the point where the consumption schedule intersects the 45-degree line:

1.   ?    the MPC equals 1.
2.   ?    the APC is zero.
3.   ?    saving equals income.
4.   ?    saving is zero.
   

If for some reason households become increasingly thrifty, we could show this by:

1.   ?    a downshift of the saving schedule.
2.   ?    an upshift of the consumption schedule.
3.   ?    an upshift of the saving schedule.
4.   ?    an increase in the equilibrium GDP.

The immediate determinants of investment spending are the:

1.   ?    expected rate of return on capital goods and the real interest rate.
2.   ?    level of saving and the real interest rate.
3.   ?    marginal propensity to consume and the real interest rate.
4.   ?    interest rate and the expected price level.

Other things equal, a 10 percent decrease in corporate income taxes will:

1.   ?    decrease the market price of real capital goods.
2.   ?    have no effect on the location of the investment-demand curve.
3.   ?    shift the investment-demand curve to the right.
4.   ?    shift the investment-demand curve to the left.

The level of aggregate expenditures in the private closed economy is determined by the:

1.   ?    expenditures of consumers and businesses.
2.   ?    intersection of the saving schedule and the 45-degree line.
3.   ?    equality of the MPC and MPS.
4.   ?    intersection of the saving and consumption schedules.