Exam 13: Consumption and the Aggregate Expenditures Model

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Suppose AE = C + I_P, and I_P is autonomous. If the level of real GDP equals $5,000 billion, and if there are no changes in the consumption function or in planned investment, then we can expect that, in the next period, real GDP will

(Multiple Choice)

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Question 61

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases. Consider a simple aggregate expenditures model, where AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. All other things unchanged, a decrease in the price level

(Multiple Choice)

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Question 62

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G =Government Purchases. Consider a simple aggregate expenditures model, where AE = C + I_P + G, and all components of aggregate expenditures except consumption are autonomous. In this model, the multiplier is found using the formula

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Question 63

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 2 -(Exhibit: Aggregate Expenditures and Real GDP 2) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Consider a simple economy where AE = C + I_P, and I_P is autonomous. What is the value of autonomous AE?

(Multiple Choice)

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Question 64

If the economy spends 80% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

(Multiple Choice)

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Question 65

In general, an increase in the income tax rate will make the aggregate expenditures curve

(Multiple Choice)

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Question 66

If an economy spends 90% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

(Multiple Choice)

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Question 67

An increase in the slope of the aggregate expenditures curve leads to a decrease in the value of the multiplier.

(True/False)

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Question 68

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. If government purchases increases by $200 billion, the aggregate expenditures curve will shift up by

(Multiple Choice)

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Question 69

Suppose the consumption function is C = $500 + 0.8Y. If Y = $1,000, then autonomous consumption is

(Multiple Choice)

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Question 70

An increase in autonomous aggregate expenditures

(Multiple Choice)

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Question 71

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. If the consumption function is C = $500 + 0.8Y, planned investment = $200, government purchases = $300, Net exports = $100, and real GDP = $1,000, what is the amount of autonomous expenditures?

(Multiple Choice)

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Question 72

Use the following to answer questions . Exhibit: Aggregate Expenditures Curve Figure 13-6 -(Exhibit: Aggregate Expenditures Curve) What is the value of the multiplier?

(Multiple Choice)

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Question 73

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G =Government Purchases. Consider a simple aggregate expenditures model, where AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. If the MPS is 0.4, then the multiplier is

(Multiple Choice)

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Question 74

Autonomous aggregate expenditures are those that automatically vary with real GDP,whereas induced expenditures only change in response to a change in an external factor.

(True/False)

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Question 75

Use the following to answer questions . Exhibit: Aggregate Expenditures and Real GDP 2 -(Exhibit: Aggregate Expenditures and Real GDP 2) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment. Consider a simple economy where AE = C + I_P, and I_P is autonomous. What is the value of AE when Y = $12,000 billion?

(Multiple Choice)

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Question 76

The assertion that consumption depends on expected average annual income is called

(Multiple Choice)

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Question 77

Use the following to answer questions . Exhibit: Aggregate Expenditures Curve Figure 13-6 -(Exhibit: Aggregate Expenditures Curve) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases. Further, I_P and G are autonomous. What is the equation of the aggregate expenditures curve? All figures in billions of dollars.

(Multiple Choice)

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Question 78

Use the following to answer questions . Exhibit: Consumption Functions Figure 13-3 -(Exhibit: Consumption Functions) Which of the following statements is false?

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Question 79

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases. Consider a simple aggregate expenditures model, where AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. All other things unchanged, an increase in the price level,

(Multiple Choice)

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Question 80

Showing 61 - 80 of 219

If the economy spends 80% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

In general, an increase in the income tax rate will make the aggregate expenditures curve

If an economy spends 90% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

An increase in the slope of the aggregate expenditures curve leads to a decrease in the value of the multiplier.

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. If government purchases increases by $200 billion, the aggregate expenditures curve will shift up by

Suppose the consumption function is C = $500 + 0.8Y. If Y = $1,000, then autonomous consumption is

An increase in autonomous aggregate expenditures

Use the following to answer questions . Exhibit: Aggregate Expenditures Curve Figure 13-6 -(Exhibit: Aggregate Expenditures Curve) What is the value of the multiplier?

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G =Government Purchases. Consider a simple aggregate expenditures model, where AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. If the MPS is 0.4, then the multiplier is

Autonomous aggregate expenditures are those that automatically vary with real GDP,whereas induced expenditures only change in response to a change in an external factor.

The assertion that consumption depends on expected average annual income is called

Use the following to answer questions . Exhibit: Consumption Functions Figure 13-3 -(Exhibit: Consumption Functions) Which of the following statements is false?

Economics: the Study of Choice

Demand and Supply

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Exam 13: Consumption and the Aggregate Expenditures Model

If the economy spends 80% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

In general, an increase in the income tax rate will make the aggregate expenditures curve

If an economy spends 90% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

An increase in the slope of the aggregate expenditures curve leads to a decrease in the value of the multiplier.

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption. If government purchases increases by $200 billion, the aggregate expenditures curve will shift up by

Suppose the consumption function is C = $500 + 0.8Y. If Y = $1,000, then autonomous consumption is

An increase in autonomous aggregate expenditures

Use the following to answer questions . Exhibit: Aggregate Expenditures Curve Figure 13-6 -(Exhibit: Aggregate Expenditures Curve) What is the value of the multiplier?

Let AE = Aggregate Expenditures, C = Consumption, IP = Planned Investment, G =Government Purchases. Consider a simple aggregate expenditures model, where AE = C + IP + G and all components of aggregate expenditures except consumption are autonomous. If the MPS is 0.4, then the multiplier is

Autonomous aggregate expenditures are those that automatically vary with real GDP,whereas induced expenditures only change in response to a change in an external factor.

The assertion that consumption depends on expected average annual income is called

Use the following to answer questions . Exhibit: Consumption Functions Figure 13-3 -(Exhibit: Consumption Functions) Which of the following statements is false?

Economics: the Study of Choice

Demand and Supply

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Filters

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G =Government Purchases. Consider a simple aggregate expenditures model, where AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous. If the MPS is 0.4, then the multiplier is