Figure 23-4 -Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP1 which is equal to $450 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?

A) -$40 billion B) -$10 billion C) $10 billion D) $40 billion A) -$40 billion B) -$10 billion C) $10 billion D) $40 billion

Exam 23: Aggregate Expenditure and Output in the Short Run

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Consumption spending is $16 million, planned investment spending is $4 million, unplanned investment spending is $2 million, government purchases are $6 million, and net export spending is $1 million. What is aggregate expenditure?

(Multiple Choice)

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Question 81

The larger the MPC, the smaller the value of the multiplier.

(True/False)

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Question 82

________ is defined as the value of a household's assets minus the value of its liabilities.

(Multiple Choice)

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Question 83

________ is defined as national income + transfers - taxes.

(Multiple Choice)

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Question 84

If the consumption function is defined as C = 7,250 + 0.8Y, what is the value of the marginal propensity to save?

(Multiple Choice)

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Question 85

Given the equations for C, I, G, and NX below, what is the value of the marginal propensity to consume? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400

(Multiple Choice)

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Question 86

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending

(Multiple Choice)

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Question 87

Table 23-12 -Refer to Table 23-12. Using the table above, answer the following questions. The numbers in the table are in billions of dollars. a. What is the equilibrium level of real GDP? b. What is the MPC? c. If potential GDP is $7,000 billion, is the economy at full employment? If not, what is the condition of the economy? d. If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?

(Essay)

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Question 88

An increase in the price level results in a(n) in household consumption spending and a(n) in investment spending.

(Multiple Choice)

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Question 89

If the marginal propensity to save is 0.25, then a $10,000 decrease in disposable income will

(Multiple Choice)

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Question 90

If inflation in the United States is lower than inflation in other countries, what will be the effect on net exports for the United States?

(Multiple Choice)

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Question 91

The key idea of the aggregate expenditure model is that in any particular year, the level of ________ is determined mainly by the level of aggregate expenditure.

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Question 92

If the marginal propensity to save is 0.4, then a $2 million increase in disposable income will

(Multiple Choice)

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Question 93

If aggregate expenditure is greater than GDP, how will the economy reach macroeconomic equilibrium?

(Multiple Choice)

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Question 94

For all points below the 45 degree line, planned aggregate expenditure will be less than GDP.

(True/False)

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Question 95

If consumption is defined as C = 2,000 + 0.8Y, then the value of the marginal propensity to save is 0.8.

(True/False)

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Question 96

The aggregate demand curve shows the relationship between the price level and the level of planned aggregate expenditure in the economy.

(True/False)

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Question 97

Decreases in the price level will

(Multiple Choice)

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Question 98

Figure 23-4 -Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP₁ which is equal to $450 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?

(Multiple Choice)

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Question 99

Figure 23-1 -Refer to Figure 23-1. At point J in the figure above, which of the following is true?

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Question 100

Showing 81 - 100 of 305

Exam 23: Aggregate Expenditure and Output in the Short Run

Consumption spending is $16 million, planned investment spending is $4 million, unplanned investment spending is $2 million, government purchases are $6 million, and net export spending is $1 million. What is aggregate expenditure?

The larger the MPC, the smaller the value of the multiplier.

________ is defined as the value of a household's assets minus the value of its liabilities.

________ is defined as national income + transfers - taxes.

If the consumption function is defined as C = 7,250 + 0.8Y, what is the value of the marginal propensity to save?

Given the equations for C, I, G, and NX below, what is the value of the marginal propensity to consume? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending

An increase in the price level results in a(n) ________ in household consumption spending and a(n) ________ in investment spending.

If the marginal propensity to save is 0.25, then a $10,000 decrease in disposable income will

If inflation in the United States is lower than inflation in other countries, what will be the effect on net exports for the United States?

The key idea of the aggregate expenditure model is that in any particular year, the level of ________ is determined mainly by the level of aggregate expenditure.

If the marginal propensity to save is 0.4, then a $2 million increase in disposable income will

If aggregate expenditure is greater than GDP, how will the economy reach macroeconomic equilibrium?

For all points below the 45 degree line, planned aggregate expenditure will be less than GDP.

If consumption is defined as C = 2,000 + 0.8Y, then the value of the marginal propensity to save is 0.8.

The aggregate demand curve shows the relationship between the price level and the level of planned aggregate expenditure in the economy.

Decreases in the price level will

Figure 23-4 -Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP1 which is equal to $450 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?

Figure 23-1 -Refer to Figure 23-1. At point J in the figure above, which of the following is true?

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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An increase in the price level results in a(n) in household consumption spending and a(n) in investment spending.

Figure 23-4 -Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP₁ which is equal to $450 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?