Exam 10: A: Basic Macroeconomic Relationships

Define the multiplier.How is it related to real GDP and the initial change in spending? How can the multiplier have a negative effect?

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Question 21

Most economists regard investment demand as being less stable than the income-consumption relationship.Looking at the determinants of the two relationships, support this contention.

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Question 22

List four factors that could shift the current consumption schedule.

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Question 23

Explain the economic impact of an increase in the multiplier.

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Question 24

Use the graphs below to answer the following questions: (a) What types of schedules do graphs A and B represent? (b) If in graph A line A2 shifts to A3 because households consume more and this change is not due to changing taxes, then what would happen to line B2 in graph B? (c) If in graph B, line B2 shifts to B1 because households save less, then what will happen to line A2 in graph A? (d) In graph A, what has caused the movement from point A to point B on line A2? (e) If there is a lump-sum tax increase causing line A2 to shift to A1, then in graph B, what will happen to B2?

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Question 25

Explain the difference between a movement along the consumption schedule and a shift in the consumption schedule.

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Question 26

Showing 21 - 26 of 26

Exam 10: A: Basic Macroeconomic Relationships

Define the multiplier.How is it related to real GDP and the initial change in spending? How can the multiplier have a negative effect?

Most economists regard investment demand as being less stable than the income-consumption relationship.Looking at the determinants of the two relationships, support this contention.

List four factors that could shift the current consumption schedule.

Explain the economic impact of an increase in the multiplier.

Explain the difference between a movement along the consumption schedule and a shift in the consumption schedule.

B: Limits, Alternatives, and Choices

A: - Limits, Alternatives, and Choices

B: The Market System and the Circular Flow

A: - The Market System and the Circular Flow

B: Demand, Supply, and Market Equilibrium

A: - Demand, Supply, and Market Equilibrium

B: Market Failures: Public Goods and Externalities

A: - Market Failures: Public Goods and Externalities

B: Governments Role and Government Failure

A: Governments Role and Government Failure

B: an Introduction to Macroeconomics

A: an Introduction to Macroeconomics

B: Measuring the Economys Output

A: Measuring the Economys Output

B: Economic Growth

A: Economic Growth

B: Business Cycles, Unemployment, and Inflation

A: Business Cycles, Unemployment, and Inflation

B: Basic Macroeconomic Relationships

B: The Aggregate Expenditures Model

A: The Aggregate Expenditures Model

B: Aggregate Demand and Aggregate Supply

A: Aggregate Demand and Aggregate Supply

B: Fiscal Policy, Deficits, Surpluses, and Debt

A: Fiscal Policy, Deficits, Surpluses, and Debt

B: Money, Banking, and Money Creation

A: Money, Banking, and Money Creation

B: Interest Rates and Monetary Policy

A: Interest Rates and Monetary Policy

C: Financial Economics

A: Long-Run Macroeconomic Adjustments

B: Long-Run Macroeconomic Adjustments

A: International Trade

B: International Trade

A: The Balance of Payments and Exchange Rates

B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

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