In Figure 10.1,which of the following could cause a shift from AD0 to AD1,ceteris paribus?

A) A decrease in investment. B) An increase in exports. C) An increase in consumer confidence. D) An increase in consumption. A) A decrease in investment. B) An increase in exports. C) An increase in consumer confidence. D) An increase in consumption.

Suppose lower interest rates suddenly lead to an injection of $325 additional investment spending into the economy and the marginal propensity to consume is 0.80. Table 10.1 $\begin{array}{c} \begin{array}{|l|} \hline\\ \text {Spending Cycles}\\ \hline \text {First-cycle}\\ \text {spending}\\ \hline \text {Second-cycle}\\ \text {spending}\\ \hline \text {Third-cycle}\\ \text {spending}\\ \hline \end{array} \begin{array}{c|} \hline \text {Change in this Cycle's Spending}\\ \text { and Income}\\ \hline\\ \quad\quad\quad\quad\quad\quad\quad\quad \$ 325 \\ \hline\\ \\ \hline\\ \\ \hline \end{array} \begin{array}{c|} \hline \text {Cumulative Increase in Spending}\\ \text {and Income}\\ \hline\\ \quad\quad\quad\quad\quad\quad\quad\quad \$325\\ \hline\\ \\ \hline\\ \\ \hline \end{array} \end{array}$ In Table 10.1,what is the cumulative increase in expenditure by the end of the second cycle?

A) $585. B) $390. C) $260. D) $65. A) $585. B) $390. C) $260. D) $65.

Exam 10: Self-Adjustment or Instability

Explore all topics

Suppose an initial increase in spending cause the aggregate demand curve in Figure 10.2 increases by a total of $60 billion,from AD₂ to AD_0.Equilibrium GDP will

(Multiple Choice)

4.8/5

(34)

Question 101

Equilibrium GDP could be upset by a change in

(Multiple Choice)

4.9/5

(35)

Question 102

Which of the following is eliminated when the economy's output is equal to full-employment GDP?

(Multiple Choice)

4.8/5

(42)

Question 103

With a consumption function of the form C = a + bY_D,which of the following would best measure how much a recession will spread?

(Multiple Choice)

4.9/5

(44)

Question 104

If aggregate demand shifts to the left by $400 billion and aggregate supply is upward-sloping,then real output will decrease by

(Multiple Choice)

4.7/5

(39)

Question 105

Refer to Figure 10.3.If full-employment GDP is $600 billion and the economy is on AD₁,

(Multiple Choice)

4.8/5

(29)

Question 106

The consumption function will shift when

(Multiple Choice)

4.9/5

(39)

Question 107

In a purely private economy,the difference between actual investment and desired investment measures the undesired change in inventory.

(True/False)

4.7/5

(35)

Question 108

Calculate the total change in aggregate demand because of an initial $300 decrease in investment spending,given that C = 150 + 0.50Y_D.

(Multiple Choice)

4.9/5

(32)

Question 109

Suppose the MPC in the economy in Figure 10.2 equals 0.8 and the shift from AD₀ to AD₁ was caused by a decrease in investment of $30 billion.What will the total decrease in aggregate demand be (i.e. ,AD₀ to AD₂)as a result of the initial $30 billion decrease?

(Multiple Choice)

4.8/5

(38)

Question 110

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD₀ to AD₁ was caused by a decrease in investment of $50 billion.What will happen to the equilibrium level of real output as a result of the initial $50 billion decrease?

(Multiple Choice)

4.8/5

(36)

Question 111

How does an inflationary gap occur?

(Essay)

4.7/5

(36)

Question 112

How can an event such as the terrorist attacks of September 2001 affect consumer and business confidence and the economy?

(Essay)

4.7/5

(46)

Question 113

In Figure 10.1,which of the following could cause a shift from AD₀ to AD₁,ceteris paribus?

(Multiple Choice)

4.8/5

(35)

Question 114

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD₀ to AD₁ was caused by a decrease in investment of $20 billion.What will the magnitude of the second decrease in aggregate demand be (for example,AD₁ to AD₂)?

(Multiple Choice)

4.8/5

(40)

Question 115

If leakages exceed injections,

(Multiple Choice)

4.8/5

(44)

Question 116

When an economy is operating at "full employment," as economists usually define the term,

(Multiple Choice)

4.9/5

(35)

Question 117

When unwanted business inventories pile up,which of the following is likely to occur?

(Multiple Choice)

5.0/5

(34)

Question 118

Suppose lower interest rates suddenly lead to an injection of $325 additional investment spending into the economy and the marginal propensity to consume is 0.80. Table 10.1 Spending Cycles First-cycle spending Second-cycle spending Third-cycle spending Change in this Cycle's Spending and Income \ 325 Cumulative Increase in Spending and Income \3 25 In Table 10.1,what is the cumulative increase in expenditure by the end of the second cycle?

(Multiple Choice)

4.7/5

(39)

Question 119

How does the multiplier process work when there is an initial decrease in autonomous spending?

(Essay)

4.8/5

(36)

Question 120

Showing 101 - 120 of 140

Exam 10: Self-Adjustment or Instability

Suppose an initial increase in spending cause the aggregate demand curve in Figure 10.2 increases by a total of $60 billion,from AD2 to AD0.Equilibrium GDP will

Equilibrium GDP could be upset by a change in

Which of the following is eliminated when the economy's output is equal to full-employment GDP?

With a consumption function of the form C = a + bYD,which of the following would best measure how much a recession will spread?

If aggregate demand shifts to the left by $400 billion and aggregate supply is upward-sloping,then real output will decrease by

Refer to Figure 10.3.If full-employment GDP is $600 billion and the economy is on AD1,

The consumption function will shift when

In a purely private economy,the difference between actual investment and desired investment measures the undesired change in inventory.

Calculate the total change in aggregate demand because of an initial $300 decrease in investment spending,given that C = 150 + 0.50YD.

Suppose the MPC in the economy in Figure 10.2 equals 0.8 and the shift from AD0 to AD1 was caused by a decrease in investment of $30 billion.What will the total decrease in aggregate demand be (i.e. ,AD0 to AD2)as a result of the initial $30 billion decrease?

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD0 to AD1 was caused by a decrease in investment of $50 billion.What will happen to the equilibrium level of real output as a result of the initial $50 billion decrease?

How does an inflationary gap occur?

How can an event such as the terrorist attacks of September 2001 affect consumer and business confidence and the economy?

In Figure 10.1,which of the following could cause a shift from AD0 to AD1,ceteris paribus?

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD0 to AD1 was caused by a decrease in investment of $20 billion.What will the magnitude of the second decrease in aggregate demand be (for example,AD1 to AD2)?

If leakages exceed injections,

When an economy is operating at "full employment," as economists usually define the term,

When unwanted business inventories pile up,which of the following is likely to occur?

How does the multiplier process work when there is an initial decrease in autonomous spending?

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

Filters

Suppose an initial increase in spending cause the aggregate demand curve in Figure 10.2 increases by a total of $60 billion,from AD₂ to AD_0.Equilibrium GDP will

With a consumption function of the form C = a + bY_D,which of the following would best measure how much a recession will spread?

Refer to Figure 10.3.If full-employment GDP is $600 billion and the economy is on AD₁,

Calculate the total change in aggregate demand because of an initial $300 decrease in investment spending,given that C = 150 + 0.50Y_D.

Suppose the MPC in the economy in Figure 10.2 equals 0.8 and the shift from AD₀ to AD₁ was caused by a decrease in investment of $30 billion.What will the total decrease in aggregate demand be (i.e. ,AD₀ to AD₂)as a result of the initial $30 billion decrease?

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD₀ to AD₁ was caused by a decrease in investment of $50 billion.What will happen to the equilibrium level of real output as a result of the initial $50 billion decrease?

In Figure 10.1,which of the following could cause a shift from AD₀ to AD₁,ceteris paribus?

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD₀ to AD₁ was caused by a decrease in investment of $20 billion.What will the magnitude of the second decrease in aggregate demand be (for example,AD₁ to AD₂)?