If consumption is defined as C = 1,350 + 0.6Y, then the marginal propensity to consume is 0.6

In the fall of 2007, most economists felt that the

a. unemployment was at the natural rate. b. unemployment rate was below the natural rate. c. inflation rate was above the natural rate. d. inflation rate was below the natural rate.

In a certain economy, when income is $400, consumer spending is $325 . The value of the multiplier for this economy is 3.33 . It follows that, when income is $450, consumer spending is

a. $360 . For this economy, an initial increase of $50 in consumer spending translates into a $266.67 increase in aggregate demand. b. $360 . For this economy, an initial increase of $50 in consumer spending translates into a $166.50 increase in aggregate demand. c. $341.67 . For this economy, an initial increase of $50 in consumer spending translates into a $266.67 increase in aggregate demand. d. $341.67 . For this economy, an initial increase of $50 in consumer spending translates into a $166.25 increase in aggregate demand.