#1
Which of the following is not a component of aggregate consumption?
Autonomous consumption
Induced consumption
Government consumption
Disposable income
#2
Which of the following best describes the concept of marginal propensity to consume (MPC)?
The proportion of total income saved
The proportion of total income spent on consumption
The proportion of disposable income saved
The proportion of disposable income spent on consumption
#3
Which of the following accurately describes induced consumption?
Consumption that varies directly with income changes
Consumption that remains constant regardless of income changes
Consumption that is independent of income changes
Consumption that is determined by government policies
#4
Which of the following factors is likely to lead to an increase in autonomous consumption?
A decrease in consumer confidence
An increase in interest rates
An increase in government transfers
A decrease in disposable income
#5
What does the Keynesian consumption function suggest?
Consumption depends only on disposable income
Consumption is independent of income
Consumption decreases with income
Consumption increases with income, but at a diminishing rate
#6
Which of the following factors is likely to increase the marginal propensity to consume (MPC)?
An increase in consumer debt
A decrease in consumer confidence
A decrease in household wealth
A decrease in income tax rates
#7
What is the relationship between consumption and disposable income in the Keynesian consumption function?
Direct relationship
Inverse relationship
No relationship
Exponential relationship
#8
Which of the following is an example of an autonomous consumption expenditure?
Purchases made using credit
Grocery shopping
Spending influenced by changes in income
Basic living expenses regardless of income level
#9
What is the primary assumption of the permanent income hypothesis regarding consumption behavior?
Consumers base their consumption decisions on current disposable income
Consumers base their consumption decisions on past income
Consumers base their consumption decisions on expected future income
Consumers base their consumption decisions on changes in wealth
#10
In the context of aggregate consumption, what does the permanent income hypothesis suggest?
People base their consumption decisions on their current income only
People base their consumption decisions on their permanent income
People base their consumption decisions on their expected future income
People base their consumption decisions on their past income
#11
What effect does an increase in the interest rate have on aggregate consumption, according to the life-cycle hypothesis?
Increases consumption
Decreases consumption
No effect on consumption
Increases saving but has no effect on consumption
#12
According to the life-cycle hypothesis, how does an increase in expected future income affect current consumption?
Increases current consumption
Decreases current consumption
No effect on current consumption
Increases saving but decreases consumption
#13
Which of the following is NOT a factor that influences aggregate consumption according to the permanent income hypothesis?
Current disposable income
Expected future income
Past income
Household wealth
#14
What effect does an increase in the interest rate typically have on consumption in the context of the life-cycle hypothesis?
Increases consumption
Decreases consumption
No effect on consumption
Increases saving but has no effect on consumption