Question 1

If the MPS is 0.10, MPC is

Accepted Answer

A)  1.10. 
B)  1.00. 
C)  0.90. 
D)  0.80. 
A)  1.10. 
B)  1.00. 
C)  0.90. 
D)  0.80.

Question 2

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. This household consumes $2,000 at an income level of

Accepted Answer

A)  $3,000. 
B)  $2,275. 
C)  $2,000. 
D)  $1,840. 
A)  $3,000. 
B)  $2,275. 
C)  $2,000. 
D)  $1,840.

Question 3

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. A decrease in Jerry's income is represented by

Accepted Answer

A)  an upward shift in Jerry's consumption function. 
B)  a decrease in the slope of Jerry's consumption function. 
C)  a movement from Point B to A. 
D)  a movement from Point C to A. 
A)  an upward shift in Jerry's consumption function. 
B)  a decrease in the slope of Jerry's consumption function. 
C)  a movement from Point B to A. 
D)  a movement from Point C to A.

Question 4

If the MPS is 0.20, the MPC is

Accepted Answer

A)  -0.20. 
B)  0.40. 
C)  0.80. 
D)  1.20. 
A)  -0.20. 
B)  0.40. 
C)  0.80. 
D)  1.20.

Question 5

If the marginal propensity to consume is 0.5, the marginal propensity to save is 0.5.

Accepted Answer

A) True 
 B)False

Question 6

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. [500 + 0.5Y] is this household's

Accepted Answer

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

Question 7

Related to the Economics in Practice on p. 476. When society as a whole saves more, the result is a drop in income but no increased saving.

Accepted Answer

A) True 
 B)False

Question 8

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. Along the line segment AC, Jerry's

Accepted Answer

A)  consumption equals his income. 
B)  consumption is greater than his income. 
C)  saving is zero. 
D)  saving is positive. 
A)  consumption equals his income. 
B)  consumption is greater than his income. 
C)  saving is zero. 
D)  saving is positive.

Question 9

Saving equals

Accepted Answer

A)  Y - C. 
B)  Y - planned I. 
C)  Y - actual I. 
D)  inventory changes. 
A)  Y - C. 
B)  Y - planned I. 
C)  Y - actual I. 
D)  inventory changes.

Question 10

Refer to the information provided in Figure 23.12 below to answer the question(s) that follow.   Figure 23.12
-Refer to Figure 23.12. Suppose the economy's aggregate expenditure line is AE1. A $10 million increase in planned investment causes aggregate equilibrium output to increase to

Accepted Answer

A)  $1,010.0 million. 
B)  $1,016.7 million. 
C)  $1,125.5 million. 
D)  $1,215.6 million. 
A)  $1,010.0 million. 
B)  $1,016.7 million. 
C)  $1,125.5 million. 
D)  $1,215.6 million.

Question 11

Refer to the information provided in Table 23.4 below to answer the question(s) that follow.
Table 23.4  
-Refer to Table 23.4. Society's MPS is

Accepted Answer

A)  0.1. 
B)  0.25. 
C)  0.8. 
D)  0.9. 
A)  0.1. 
B)  0.25. 
C)  0.8. 
D)  0.9.

Question 12

Lower interest rates are likely to

Accepted Answer

A)  have no effect on consumer spending or saving. 
B)  decrease consumer spending and increase consumer saving. 
C)  decrease both consumer spending and consumer saving. 
D)  increase consumer spending and decrease consumer saving. 
A)  have no effect on consumer spending or saving. 
B)  decrease consumer spending and increase consumer saving. 
C)  decrease both consumer spending and consumer saving. 
D)  increase consumer spending and decrease consumer saving.

Question 13

If C = 200 + 0.5Y and I = 100, then the equilibrium level of income is

Accepted Answer

A)  175. 
B)  300. 
C)  400. 
D)  600. 
A)  175. 
B)  300. 
C)  400. 
D)  600.

Question 14

Refer to the information provided in Figure 23.12 below to answer the question(s) that follow.   Figure 23.12
-Refer to Figure 23.12. [600 + 0.4Y] represents the

Accepted Answer

A)  aggregate expenditures function. 
B)  saving function. 
C)  equilibrium function. 
D)  multiplier function. 
A)  aggregate expenditures function. 
B)  saving function. 
C)  equilibrium function. 
D)  multiplier function.

Question 15

Refer to the information provided in Figure 23.7 below to answer the question(s) that follow.   Figure 23.7
-Refer to Figure 23.7. In Azora, planned investment does not vary with income. Azora's planned investment function is represented by

Accepted Answer

A)  Panel A. 
B)  Panel B. 
C)  Panel C. 
D)  Panel D. 
A)  Panel A. 
B)  Panel B. 
C)  Panel C. 
D)  Panel D.

Exam 23: Aggregate Expenditure and Equilibrium Output

If the MPS is 0.10, MPC is

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. This household consumes $2,000 at an income level of

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. A decrease in Jerry's income is represented by

If the MPS is 0.20, the MPC is

If the marginal propensity to consume is 0.5, the marginal propensity to save is 0.5.

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. [500 + 0.5Y] is this household's

Related to the Economics in Practice on p. 476. When society as a whole saves more, the result is a drop in income but no increased saving.

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. Along the line segment AC, Jerry's

Saving equals

Refer to the information provided in Figure 23.12 below to answer the question(s) that follow. Figure 23.12 -Refer to Figure 23.12. Suppose the economy's aggregate expenditure line is AE1. A $10 million increase in planned investment causes aggregate equilibrium output to increase to

Refer to the information provided in Table 23.4 below to answer the question(s) that follow. Table 23.4 -Refer to Table 23.4. Society's MPS is

Lower interest rates are likely to

If C = 200 + 0.5Y and I = 100, then the equilibrium level of income is

Refer to the information provided in Figure 23.12 below to answer the question(s) that follow. Figure 23.12 -Refer to Figure 23.12. [600 + 0.4Y] represents the

Refer to the information provided in Figure 23.7 below to answer the question(s) that follow. Figure 23.7 -Refer to Figure 23.7. In Azora, planned investment does not vary with income. Azora's planned investment function is represented by

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

Refer to the information provided in Figure 23.12 below to answer the question(s) that follow. Figure 23.12 -Refer to Figure 23.12. Suppose the economy's aggregate expenditure line is AE₁. A $10 million increase in planned investment causes aggregate equilibrium output to increase to