Question 1

Firms hold planned inventories in anticipation of sales.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the information provided in Table 23.1 below to answer the question(s) that follow.
Table 23.1  
-Refer to Table 23.1. At an aggregate income level of $100, aggregate saving would be

Accepted Answer

A)  -$70. 
B)  -$30. 
C)  $50. 
D)  $70. 
A)  -$70. 
B)  -$30. 
C)  $50. 
D)  $70.

Question 3

Refer to the information provided in Table 23.7 below to answer the question(s) that follow.
Table 23.7  
-Refer to Table 23.7. At an aggregate output level of $200 billion, the unplanned inventory change is

Accepted Answer

A)  -$200 billion. 
B)  -$150 billion. 
C)  -$50 billion. 
D)  $100 billion. 
A)  -$200 billion. 
B)  -$150 billion. 
C)  -$50 billion. 
D)  $100 billion.

Question 4

Y = C + S even when the economy is not in equilibrium.

Accepted Answer

A) True 
 B)False

Question 5

If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $________ and his saving rises by $________.

Accepted Answer

A)  500; 100 
B)  2,500; 200 
C)  2,000; 500 
D)  2,500; 20 
A)  500; 100 
B)  2,500; 200 
C)  2,000; 500 
D)  2,500; 20

Question 6

Refer to the information provided in Table 23.7 below to answer the question(s) that follow.
Table 23.7  
-Refer to Table 23.7. At an aggregate output level of $800 billion, aggregate saving

Accepted Answer

A)  equals -$50 billion. 
B)  equals $0. 
C)  equals $50 billion. 
D)  cannot be determined from this information. 
A)  equals -$50 billion. 
B)  equals $0. 
C)  equals $50 billion. 
D)  cannot be determined from this information.

Question 7

If actual investment exceeds planned investment

Accepted Answer

A)  there will be an accumulation of inventories. 
B)  there will be no change in inventories. 
C)  there will be a decline in inventories. 
D)  none of the above. 
A)  there will be an accumulation of inventories. 
B)  there will be no change in inventories. 
C)  there will be a decline in inventories. 
D)  none of the above.

Question 8

Related to the Economics in Practice on p. 476: According to the "paradox of thrift," increased efforts to save will cause a(n)

Accepted Answer

A)  increase in income and an increase in overall saving. 
B)  increase in income but no overall change in saving. 
C)  decrease in income and an overall decrease in saving. 
D)  decrease in income but an increase in saving. 
A)  increase in income and an increase in overall saving. 
B)  increase in income but no overall change in saving. 
C)  decrease in income and an overall decrease in saving. 
D)  decrease in income but an increase in saving.

Question 9

Refer to the information provided in Table 23.7 below to answer the question(s) that follow.
Table 23.7  
-Refer to Table 23.7. At an aggregate output level of $400 billion, planned expenditure equals

Accepted Answer

A)  $450 billion. 
B)  $500 billion. 
C)  $550 billion. 
D)  $850 billion. 
A)  $450 billion. 
B)  $500 billion. 
C)  $550 billion. 
D)  $850 billion.

Question 10

Refer to the information provided in Figure 23.11 below to answer the question(s) that follow.   Figure 23.11
-Refer to Figure 23.11. If MPC increases to 0.8, equilibrium aggregate output

Accepted Answer

A)  increases to $250 million. 
B)  remains at $200 million. 
C)  increases to $400 million. 
D)  cannot be determined from the given information. 
A)  increases to $250 million. 
B)  remains at $200 million. 
C)  increases to $400 million. 
D)  cannot be determined from the given information.

Question 11

If the consumption function is above the 45-degree line

Accepted Answer

A)  consumption is less than income and saving is positive. 
B)  consumption is less than income and saving is negative. 
C)  consumption exceeds income and saving is positive. 
D)  consumption exceeds income and saving is negative. 
A)  consumption is less than income and saving is positive. 
B)  consumption is less than income and saving is negative. 
C)  consumption exceeds income and saving is positive. 
D)  consumption exceeds income and saving is negative.

Question 12

Refer to the information provided in Figure 23.1 below to answer the question(s) that follow.   Figure 23.1
-Refer to Figure 23.1. A(n) ________ in the amount of ________ this household makes when this household's income is zero shifts the saving function downward.

Accepted Answer

A)  decrease; consumption 
B)  decrease; spending 
C)  increase; saving 
D)  increase; consumption 
A)  decrease; consumption 
B)  decrease; spending 
C)  increase; saving 
D)  increase; consumption

Question 13

Refer to the information provided in Figure 23.3 below to answer the question(s) that follow.   Figure 23.3
-Refer to Figure 23.3. [-60 + 0.3Y] is this society's

Accepted Answer

A)  MPC. 
B)  MPS. 
C)  saving function. 
D)  consumption function. 
A)  MPC. 
B)  MPS. 
C)  saving function. 
D)  consumption function.

Question 14

Refer to the information provided in Figure 23.2 below to answer the question(s) that follow.   Figure 23.2
-Refer to Figure 23.2. Jerry's saving equals zero at income level

Accepted Answer

A)  zero. 
B)  Y1. 
C)  Y2. 
D)  Y2 - Y1. 
A)  zero. 
B)  Y1. 
C)  Y2. 
D)  Y2 - Y1.

Question 15

Assume there is no government or foreign sector. If the multiplier is 5, a $4 billion increase in investment will cause aggregate output to increase by

Accepted Answer

A)  $125 billion. 
B)  $80 billion. 
C)  $50 billion. 
D)  $20 billion. 
A)  $125 billion. 
B)  $80 billion. 
C)  $50 billion. 
D)  $20 billion.

Question 16

When planned spending exceeds output, there is an unplanned inventory investment.

Accepted Answer

A) True 
 B)False

Question 17

In macroeconomics, the point at which planned aggregate expenditures equals aggregate output

Accepted Answer

A)  is the equilibrium point. 
B)  is where saving is negative. 
C)  is only achieved if net exports are zero. 
D)  only occurs when the MPC is equal to the MPS. 
A)  is the equilibrium point. 
B)  is where saving is negative. 
C)  is only achieved if net exports are zero. 
D)  only occurs when the MPC is equal to the MPS.

Question 18

Refer to the information provided in Table 23.1 below to answer the question(s) that follow.
Table 23.1  
-Refer to Table 23.1. Society's MPC is

Accepted Answer

A)  0.95. 
B)  0.90. 
C)  0.80. 
D)  0.05. 
A)  0.95. 
B)  0.90. 
C)  0.80. 
D)  0.05.

Question 19

Without the government or the foreign sector in the income-expenditure model, consumption equals

Accepted Answer

A)  planned aggregate expenditures plus actual investment. 
B)  planned aggregate expenditures minus inventory adjustment. 
C)  planned aggregate expenditures plus planned investment. 
D)  planned aggregate expenditures minus planned investment. 
A)  planned aggregate expenditures plus actual investment. 
B)  planned aggregate expenditures minus inventory adjustment. 
C)  planned aggregate expenditures plus planned investment. 
D)  planned aggregate expenditures minus planned investment.

Question 20

If you earn an additional $200 in disposable income one week for feeding your neighbor's ferret

Accepted Answer

A)  the total of your consumption and saving will increase by more than $200. 
B)  the total of your consumption and saving will increase by $200. 
C)  the total of your consumption and saving will increase by less than $200. 
D)  your consumption will increase by more than $200, even if your MPS is 0.1. 
A)  the total of your consumption and saving will increase by more than $200. 
B)  the total of your consumption and saving will increase by $200. 
C)  the total of your consumption and saving will increase by less than $200. 
D)  your consumption will increase by more than $200, even if your MPS is 0.1.

Exam 23: Aggregate Expenditure and Equilibrium Output

Firms hold planned inventories in anticipation of sales.

Refer to the information provided in Table 23.1 below to answer the question(s) that follow. Table 23.1 -Refer to Table 23.1. At an aggregate income level of $100, aggregate saving would be

Refer to the information provided in Table 23.7 below to answer the question(s) that follow. Table 23.7 -Refer to Table 23.7. At an aggregate output level of $200 billion, the unplanned inventory change is

Y = C + S even when the economy is not in equilibrium.

If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $________ and his saving rises by $________.

Refer to the information provided in Table 23.7 below to answer the question(s) that follow. Table 23.7 -Refer to Table 23.7. At an aggregate output level of $800 billion, aggregate saving

If actual investment exceeds planned investment

Related to the Economics in Practice on p. 476: According to the "paradox of thrift," increased efforts to save will cause a(n)

Refer to the information provided in Table 23.7 below to answer the question(s) that follow. Table 23.7 -Refer to Table 23.7. At an aggregate output level of $400 billion, planned expenditure equals

Refer to the information provided in Figure 23.11 below to answer the question(s) that follow. Figure 23.11 -Refer to Figure 23.11. If MPC increases to 0.8, equilibrium aggregate output

If the consumption function is above the 45-degree line

Refer to the information provided in Figure 23.1 below to answer the question(s) that follow. Figure 23.1 -Refer to Figure 23.1. A(n) ________ in the amount of ________ this household makes when this household's income is zero shifts the saving function downward.

Refer to the information provided in Figure 23.3 below to answer the question(s) that follow. Figure 23.3 -Refer to Figure 23.3. [-60 + 0.3Y] is this society's

Refer to the information provided in Figure 23.2 below to answer the question(s) that follow. Figure 23.2 -Refer to Figure 23.2. Jerry's saving equals zero at income level

Assume there is no government or foreign sector. If the multiplier is 5, a $4 billion increase in investment will cause aggregate output to increase by

When planned spending exceeds output, there is an unplanned inventory investment.

In macroeconomics, the point at which planned aggregate expenditures equals aggregate output

Refer to the information provided in Table 23.1 below to answer the question(s) that follow. Table 23.1 -Refer to Table 23.1. Society's MPC is

Without the government or the foreign sector in the income-expenditure model, consumption equals

If you earn an additional $200 in disposable income one week for feeding your neighbor's ferret

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: The Labor and Land Markets

Input Demand: The Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $ and his saving rises by $.

Refer to the information provided in Figure 23.1 below to answer the question(s) that follow. Figure 23.1 -Refer to Figure 23.1. A(n) in the amount of this household makes when this household's income is zero shifts the saving function downward.