Question 1

If the market interest rate decreases,then there will be _____.

Accepted Answer

A) an upward movement along the investment demand curve 
B) a downward movement along the investment demand curve 
C) a rightward shift of the investment demand curve 
D) a leftward shift of the investment demand curve 
E) no movement along or shift of the investment demand curve 
A) an upward movement along the investment demand curve 
B) a downward movement along the investment demand curve 
C) a rightward shift of the investment demand curve 
D) a leftward shift of the investment demand curve 
E) no movement along or shift of the investment demand curve

Question 2

The table given below shows the disposable income and consumption of a household.In the table below,saving:
Table 9.1
?
$\begin{array}{cc}\text { Disposable }\
\text { Income }(\$) & \text { Consumption }(\$) \
\hline 1,000 & 800 \
1,100 & 880 \
1,200 & 960 \
1,300 & 1,040 \
1,400 & 1,120
\end{array}$

Accepted Answer

A) decreases as disposable income increases. 
B) decreases as disposable income decreases. 
C) remains constant as disposable income increases. 
D) is negative at a disposable income of $1,000. 
E) is negative at a disposable income of $1,400. 
A) decreases as disposable income increases. 
B) decreases as disposable income decreases. 
C) remains constant as disposable income increases. 
D) is negative at a disposable income of $1,000. 
E) is negative at a disposable income of $1,400.

Question 3

A decrease in net wealth will _____.

Accepted Answer

A) shift the consumption function downward 
B) make the consumption function steeper 
C) cause an upward movement along the consumption function 
D) cause a downward movement along the consumption function 
E) make the consumption function flatter 
A) shift the consumption function downward 
B) make the consumption function steeper 
C) cause an upward movement along the consumption function 
D) cause a downward movement along the consumption function 
E) make the consumption function flatter

Question 4

If the marginal propensity to consume (MPC)equals 0.9,the multiplier is _____.

Accepted Answer

A) 1 
B) 2 
C) 5 
D) 10 
E) 12 
A) 1 
B) 2 
C) 5 
D) 10 
E) 12

Question 5

A decrease in the U.S.price level,other things constant,will _____.

Accepted Answer

A) stimulate U.S.exports,pushing the aggregate demand curve to the right 
B) stimulate U.S.imports,pushing the aggregate demand curve to the right 
C) stimulate U.S.exports but discourage imports,causing a downward movement along a given aggregate demand curve 
D) discourage U.S.exports but stimulate imports,causing an upward movement along a given aggregate demand curve 
E) not affect U.S.net exports,so the aggregate quantity demanded will remain constant 
A) stimulate U.S.exports,pushing the aggregate demand curve to the right 
B) stimulate U.S.imports,pushing the aggregate demand curve to the right 
C) stimulate U.S.exports but discourage imports,causing a downward movement along a given aggregate demand curve 
D) discourage U.S.exports but stimulate imports,causing an upward movement along a given aggregate demand curve 
E) not affect U.S.net exports,so the aggregate quantity demanded will remain constant

Question 6

The smaller the marginal propensity to save,other things constant,_____.

Accepted Answer

A) the smaller the marginal propensity to consume 
B) the larger the multiplier 
C) the smaller the multiplier 
D) the flatter the consumption function 
E) the steeper the saving function 
A) the smaller the marginal propensity to consume 
B) the larger the multiplier 
C) the smaller the multiplier 
D) the flatter the consumption function 
E) the steeper the saving function

Question 7

Expectations that the price level will increase in the future will:

Accepted Answer

A) shift the current consumption function upward. 
B) make the current consumption function steeper. 
C) make the current consumption function flatter. 
D) result in a downward movement along the current consumption function. 
E) shift the current consumption function downward. 
A) shift the current consumption function upward. 
B) make the current consumption function steeper. 
C) make the current consumption function flatter. 
D) result in a downward movement along the current consumption function. 
E) shift the current consumption function downward.

Question 8

If households save $40 billion less at each level of income and the marginal propensity to consume (MPC)is 0.8,the aggregate expenditure line will _____.

Accepted Answer

A) intersect the 45-degree line at a real GDP of $40 billion 
B) shift upward by $40 billion 
C) shift downward by $40 billion 
D) shift upward by $200 billion because of the multiplier mechanism 
E) shift downward by $200 billion because of the multiplier mechanism 
A) intersect the 45-degree line at a real GDP of $40 billion 
B) shift upward by $40 billion 
C) shift downward by $40 billion 
D) shift upward by $200 billion because of the multiplier mechanism 
E) shift downward by $200 billion because of the multiplier mechanism

Question 9

If the price level in an economy decreases,other things constant,people consume _____.

Accepted Answer

A) more because nominal income falls 
B) less because nominal income rises 
C) more because the real value of their wealth increases 
D) less because real income decreases 
E) less because the real value of their wealth decreases 
A) more because nominal income falls 
B) less because nominal income rises 
C) more because the real value of their wealth increases 
D) less because real income decreases 
E) less because the real value of their wealth decreases

Question 10

Which of the following will shift the consumption function upward?

Accepted Answer

A) A lower interest rate 
B) An increase in the interest rate 
C) An increase in disposable income 
D) A decrease in disposable income 
E) Expectations of lower prices in the future 
A) A lower interest rate 
B) An increase in the interest rate 
C) An increase in disposable income 
D) A decrease in disposable income 
E) Expectations of lower prices in the future

If the market interest rate decreases,then there will be _____.

A decrease in net wealth will _____.

If the marginal propensity to consume (MPC)equals 0.9,the multiplier is _____.

A decrease in the U.S.price level,other things constant,will _____.

The smaller the marginal propensity to save,other things constant,_____.

Expectations that the price level will increase in the future will:

If households save $40 billion less at each level of income and the marginal propensity to consume (MPC)is 0.8,the aggregate expenditure line will _____.

If the price level in an economy decreases,other things constant,people consume _____.

Which of the following will shift the consumption function upward?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 9: Aggregate Demand

If the market interest rate decreases,then there will be _____.

A decrease in net wealth will _____.

If the marginal propensity to consume (MPC)equals 0.9,the multiplier is _____.

A decrease in the U.S.price level,other things constant,will _____.

The smaller the marginal propensity to save,other things constant,_____.

Expectations that the price level will increase in the future will:

If households save $40 billion less at each level of income and the marginal propensity to consume (MPC)is 0.8,the aggregate expenditure line will _____.

If the price level in an economy decreases,other things constant,people consume _____.

Which of the following will shift the consumption function upward?

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters