Question 1

For those in the lowest tax bracket,each dollar tax cut increases disposable income by about $1.33.

Accepted Answer

A) True 
 B)False

Question 2

The system of measurement for expressing macroeconomic data is called

Accepted Answer

A)  national income accounting. 
B)  balance of payment accounting. 
C)  generally accepted accounting principles. 
D)  double entry bookkeeping. 
A)  national income accounting. 
B)  balance of payment accounting. 
C)  generally accepted accounting principles. 
D)  double entry bookkeeping.

Question 3

The sum of all factor payments in the economy yields

Accepted Answer

A)  gross domestic product. 
B)  national income. 
C)  disposable income. 
D)  net domestic product. 
A)  gross domestic product. 
B)  national income. 
C)  disposable income. 
D)  net domestic product.

Question 4

The slope of the consumption function is equal to the marginal propensity to save.

Accepted Answer

A) True 
 B)False

Question 5

If DI falls by $100 billion,and C falls by $90 billion,the slope of the consumption is

Accepted Answer

A)  −0.45. 
B)  0.45. 
C)  −0.90. 
D)  0.90. 
E)  0.50. 
A)  −0.45. 
B)  0.45. 
C)  −0.90. 
D)  0.90. 
E)  0.50.

Question 6

The accounting identity for the economy's factor payments can be written as ____.

Accepted Answer

A)  GDP = wages + interest + rents + profits 
B)  GDP = consumption + investment + government + intermediate goods + net exports 
C)  GDP = wages + interest + rents + net exports 
D)  GDP = wages + interest + rents + saving + investment 
A)  GDP = wages + interest + rents + profits 
B)  GDP = consumption + investment + government + intermediate goods + net exports 
C)  GDP = wages + interest + rents + net exports 
D)  GDP = wages + interest + rents + saving + investment

Question 7

On a graph with consumption on the vertical axis and disposable income on the horizontal axis,the slope of the line is

Accepted Answer

A)  greater than one. 
B)  equal to one. 
C)  less than one. 
D)  undefined. 
A)  greater than one. 
B)  equal to one. 
C)  less than one. 
D)  undefined.

Question 8

If a U.S.citizen buys a car produced in Germany,this transaction will add to

Accepted Answer

A)  U.S.aggregate demand. 
B)  U.S.aggregate supply. 
C)  German aggregate demand. 
D)  German imports. 
A)  U.S.aggregate demand. 
B)  U.S.aggregate supply. 
C)  German aggregate demand. 
D)  German imports.

Question 9

If an economist wants to make a prediction about the effects of a change in disposable income on the change in consumption spending based on historical data,she must assume that

Accepted Answer

A)  the future will closely resemble the past. 
B)  consumption and disposable income will be negatively related. 
C)  the consumption function will have a downward slope. 
D)  as disposable income increases,consumer spending will remain constant. 
A)  the future will closely resemble the past. 
B)  consumption and disposable income will be negatively related. 
C)  the consumption function will have a downward slope. 
D)  as disposable income increases,consumer spending will remain constant.

Question 10

The largest income component in the national income accounts is

Accepted Answer

A)  wages. 
B)  rents. 
C)  corporate profits. 
D)  interest. 
A)  wages. 
B)  rents. 
C)  corporate profits. 
D)  interest.

Question 11

Employee compensation accounts for about what percentage of national income?

Accepted Answer

A)  33 percent 
B)  42 percent 
C)  66 percent 
D)  90 percent 
A)  33 percent 
B)  42 percent 
C)  66 percent 
D)  90 percent

Question 12

Economists expect the relationship between consumption and disposable income to be

Accepted Answer

A)  unpredictable. 
B)  transitory. 
C)  fixed. 
D)  inverse 
E)  stable. 
A)  unpredictable. 
B)  transitory. 
C)  fixed. 
D)  inverse 
E)  stable.

Question 13

Whirlpool Corporation buys steel in sheets to manufacture refrigerators.Whirlpool also buys a new factory and a metal press to mold the steel.Which purchases are included in GDP?

Accepted Answer

A)  the steel 
B)  the steel,the factory,and the metal press 
C)  the factory and the metal press 
D)  the steel and the metal press 
A)  the steel 
B)  the steel,the factory,and the metal press 
C)  the factory and the metal press 
D)  the steel and the metal press

Question 14

Which of the following would lead you to predict an upward shift in the consumption function?

Accepted Answer

A)  a decrease in the value of real wealth 
B)  a decrease in disposable income 
C)  an increase in the value of real wealth 
D)  an increase in the price level 
A)  a decrease in the value of real wealth 
B)  a decrease in disposable income 
C)  an increase in the value of real wealth 
D)  an increase in the price level

Question 15

Changes in the value of stocks may play a big role in the consumption decisions of individuals.How would changes in the stock market affect the consumption function?

Accepted Answer

Corporate stocks are an increasingly pop

Question 16

In which of the following years was a tax cut ineffective in stimulating aggregate demand?

Accepted Answer

A)  1964 
B)  1975 
C)  1981 
D)  1999 
A)  1964 
B)  1975 
C)  1981 
D)  1999

Question 17

National income is the sum of

Accepted Answer

A)  wages and profits. 
B)  wages,interest,profits,and rent. 
C)  interest and rent. 
D)  wages,transfer payments,and tax revenues. 
A)  wages and profits. 
B)  wages,interest,profits,and rent. 
C)  interest and rent. 
D)  wages,transfer payments,and tax revenues.

Question 18

The difference between Gross National Product and Net National Product is the

Accepted Answer

A)  rate of inflation. 
B)  statistical discrepancy encountered in calculating GDP. 
C)  difference between real versus nominal GDP. 
D)  depreciation of the economy's capital stock. 
A)  rate of inflation. 
B)  statistical discrepancy encountered in calculating GDP. 
C)  difference between real versus nominal GDP. 
D)  depreciation of the economy's capital stock.

Question 19

Saving is a leakage in the sense that

Accepted Answer

A)  saving is lost to the economy and ultimately leads to stagnation. 
B)  the financial system often makes negative profits. 
C)  it often accompanies a trade deficit. 
D)  consumers spend less than their total income. 
A)  saving is lost to the economy and ultimately leads to stagnation. 
B)  the financial system often makes negative profits. 
C)  it often accompanies a trade deficit. 
D)  consumers spend less than their total income.

Question 20

The value of intermediate goods is not included in the calculation of GDP to avoid the problem of

Accepted Answer

A)  depreciation. 
B)  inflation. 
C)  double counting. 
D)  transfer payments. 
A)  depreciation. 
B)  inflation. 
C)  double counting. 
D)  transfer payments.

For those in the lowest tax bracket,each dollar tax cut increases disposable income by about $1.33.

The system of measurement for expressing macroeconomic data is called

The sum of all factor payments in the economy yields

The slope of the consumption function is equal to the marginal propensity to save.

If DI falls by $100 billion,and C falls by $90 billion,the slope of the consumption is

The accounting identity for the economy's factor payments can be written as ____.

On a graph with consumption on the vertical axis and disposable income on the horizontal axis,the slope of the line is

If a U.S.citizen buys a car produced in Germany,this transaction will add to

If an economist wants to make a prediction about the effects of a change in disposable income on the change in consumption spending based on historical data,she must assume that

The largest income component in the national income accounts is

Employee compensation accounts for about what percentage of national income?

Economists expect the relationship between consumption and disposable income to be

Whirlpool Corporation buys steel in sheets to manufacture refrigerators.Whirlpool also buys a new factory and a metal press to mold the steel.Which purchases are included in GDP?

Which of the following would lead you to predict an upward shift in the consumption function?

Changes in the value of stocks may play a big role in the consumption decisions of individuals.How would changes in the stock market affect the consumption function?

In which of the following years was a tax cut ineffective in stimulating aggregate demand?

National income is the sum of

The difference between Gross National Product and Net National Product is the

Saving is a leakage in the sense that

The value of intermediate goods is not included in the calculation of GDP to avoid the problem of

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 8: Aggregate Demand and The Powerful Consumer

For those in the lowest tax bracket,each dollar tax cut increases disposable income by about $1.33.

The system of measurement for expressing macroeconomic data is called

The sum of all factor payments in the economy yields

The slope of the consumption function is equal to the marginal propensity to save.

If DI falls by $100 billion,and C falls by $90 billion,the slope of the consumption is

The accounting identity for the economy's factor payments can be written as ____.

On a graph with consumption on the vertical axis and disposable income on the horizontal axis,the slope of the line is

If a U.S.citizen buys a car produced in Germany,this transaction will add to

If an economist wants to make a prediction about the effects of a change in disposable income on the change in consumption spending based on historical data,she must assume that

The largest income component in the national income accounts is

Employee compensation accounts for about what percentage of national income?

Economists expect the relationship between consumption and disposable income to be

Whirlpool Corporation buys steel in sheets to manufacture refrigerators.Whirlpool also buys a new factory and a metal press to mold the steel.Which purchases are included in GDP?

Which of the following would lead you to predict an upward shift in the consumption function?

Changes in the value of stocks may play a big role in the consumption decisions of individuals.How would changes in the stock market affect the consumption function?

In which of the following years was a tax cut ineffective in stimulating aggregate demand?

National income is the sum of

The difference between Gross National Product and Net National Product is the

Saving is a leakage in the sense that

The value of intermediate goods is not included in the calculation of GDP to avoid the problem of

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters