The consumption schedule is such that:

- both the APC and the MPC increase as income rises.
- the APC is constant and the MPC declines as income rises.
- the MPC is constant and the APC declines as income rises.
- the MPC and APC must be equal at all levels of income.

The average propensity to consume indicates the:

- amount by which income exceeds consumption.
- relationship between a change in saving and the consequent change in consumption.
- percentage of total income that will be consumed.
- percentage of a change in income that will be consumed.

The relationship between consumption and disposable income is such that:

- an inverse and stable relationship exists between consumption and income.
- a direct, but very volatile, relationship exists between consumption and income.
- a direct and quite stable relationship exists between consumption and income.
- the two are always equal.

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

- MPC is greater than 1.
- MPS is negative.
- APC is greater than 1.
- APS is positive.

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

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

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

- the MPC equals 1.
- the APC is zero.
- saving equals income.
- saving is zero.

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

- a downshift of the saving schedule.
- an upshift of the consumption schedule.
- an upshift of the saving schedule.
- an increase in the equilibrium GDP.

The immediate determinants of investment spending are the:

- expected rate of return on capital goods and the real interest rate.
- level of saving and the real interest rate.
- marginal propensity to consume and the real interest rate.
- interest rate and the expected price level.

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

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

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

- expenditures of consumers and businesses.
- intersection of the saving schedule and the 45-degree line.
- equality of the MPC and MPS.
- intersection of the saving and consumption schedules.