Exam 11: Spending, Output, and Fiscal Policy

Suppose that the owner of a local ice cream store, knowing that demand for ice cream is higher when the weather is warmer, always charges a price in cents for a scoop of ice cream that is equal to two times the current outdoor temperature, measured in Fahrenheit (so that if it is 90 degrees outside, the ice cream is $1.80 per scoop).This type of behavior is ______.

(Multiple Choice)

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Question 61

As disposable income increases, consumption:

(Multiple Choice)

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Question 62

All of the following would be included in planned aggregate expenditure except:

(Multiple Choice)

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Question 63

If planned aggregate expenditure (PAE) in an economy equals 1,000 + 0.9Y and potential output (Y*) equals 9,000, then this economy has:

(Multiple Choice)

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Question 64

A recession in the United States the demand for exports from Canada resulting in a reduction in Canadian autonomous expenditures and a(n) output gap in Canada.

(Multiple Choice)

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(40)

Question 65

In the short run, with predetermined prices, when output is greater than planned aggregate expenditures:

(Multiple Choice)

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Question 66

Suppose the stock market crashed, wiping out $5 trillion of household wealth.Consistent with economic models based on historical trends, consumption spending might fall by as much as, but probably not more than:

(Multiple Choice)

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Question 67

In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20.Planned aggregate expenditure equals:

(Multiple Choice)

4.8/5

(30)

Question 68

If short-run equilibrium output equals 50,000 and potential output (Y*) equals 45,000, then this economy has a(n) gap that can be closed by ___.

(Multiple Choice)

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Question 69

Refer to the figure below. Based on the figure, if autonomous spending falls from 400 to 200, then the new short-run equilibrium output will equal:

(Multiple Choice)

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Question 70

Government policies that are used to affect planned aggregate expenditure, with the objective of eliminating output gaps, are called ______ policies.

(Multiple Choice)

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Question 71

Refer to the figure below.] Based on the figure, when PAE = 200 + 0.5Y, short-run equilibrium output equals:

(Multiple Choice)

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(34)

Question 72

The largest component of planned aggregate expenditure is:

(Multiple Choice)

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Question 73

Changes in government purchases affect planned spending _, and changes in taxes and/or transfers affect planned spending ___.

(Multiple Choice)

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(27)

Question 74

Refer to the figure below. Based on the figure, when PAE = 600 + 0.5Y, short-run equilibrium output equals:

(Multiple Choice)

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(31)

Question 75

In the short-run Keynesian model where the marginal propensity to consume is 0.5, to offset an expansionary gap resulting from a $1 billion increase in autonomous consumption, government purchases must be:

(Multiple Choice)

4.9/5

(37)

Question 76

As disposable income decreases, consumption:

(Multiple Choice)

4.8/5

(32)

Question 77

When real output decreases, planned aggregate expenditures decrease because:

(Multiple Choice)

4.9/5

(39)

Question 78

A fiscal policy action to close an expansionary gap is to:

(Multiple Choice)

4.8/5

(29)

Question 79

In the basic Keynesian model, a tax increase:

(Multiple Choice)

4.9/5

(36)

Question 80

Showing 61 - 80 of 145

As disposable income increases, consumption:

All of the following would be included in planned aggregate expenditure except:

If planned aggregate expenditure (PAE) in an economy equals 1,000 + 0.9Y and potential output (Y*) equals 9,000, then this economy has:

A recession in the United States the demand for exports from Canada resulting in a reduction in Canadian autonomous expenditures and a(n) output gap in Canada.

In the short run, with predetermined prices, when output is greater than planned aggregate expenditures:

Suppose the stock market crashed, wiping out $5 trillion of household wealth.Consistent with economic models based on historical trends, consumption spending might fall by as much as, but probably not more than:

In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20.Planned aggregate expenditure equals:

If short-run equilibrium output equals 50,000 and potential output (Y*) equals 45,000, then this economy has a(n) gap that can be closed by ___.

Refer to the figure below. Based on the figure, if autonomous spending falls from 400 to 200, then the new short-run equilibrium output will equal:

Government policies that are used to affect planned aggregate expenditure, with the objective of eliminating output gaps, are called ______ policies.

Refer to the figure below.] Based on the figure, when PAE = 200 + 0.5Y, short-run equilibrium output equals:

The largest component of planned aggregate expenditure is:

Changes in government purchases affect planned spending _, and changes in taxes and/or transfers affect planned spending ___.

Refer to the figure below. Based on the figure, when PAE = 600 + 0.5Y, short-run equilibrium output equals:

In the short-run Keynesian model where the marginal propensity to consume is 0.5, to offset an expansionary gap resulting from a $1 billion increase in autonomous consumption, government purchases must be:

As disposable income decreases, consumption:

When real output decreases, planned aggregate expenditures decrease because:

A fiscal policy action to close an expansionary gap is to:

In the basic Keynesian model, a tax increase:

Thinking Like an Economist

Comparative Advantage

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

Exam 11: Spending, Output, and Fiscal Policy

As disposable income increases, consumption:

All of the following would be included in planned aggregate expenditure except:

If planned aggregate expenditure (PAE) in an economy equals 1,000 + 0.9Y and potential output (Y*) equals 9,000, then this economy has:

A recession in the United States ______ the demand for exports from Canada resulting in a reduction in Canadian autonomous expenditures and a(n) ______ output gap in Canada.

In the short run, with predetermined prices, when output is greater than planned aggregate expenditures:

Suppose the stock market crashed, wiping out $5 trillion of household wealth.Consistent with economic models based on historical trends, consumption spending might fall by as much as, but probably not more than:

In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20.Planned aggregate expenditure equals:

If short-run equilibrium output equals 50,000 and potential output (Y*) equals 45,000, then this economy has a(n) ______ gap that can be closed by _________.

Refer to the figure below. Based on the figure, if autonomous spending falls from 400 to 200, then the new short-run equilibrium output will equal:

Government policies that are used to affect planned aggregate expenditure, with the objective of eliminating output gaps, are called ______ policies.

Refer to the figure below.] Based on the figure, when PAE = 200 + 0.5Y, short-run equilibrium output equals:

The largest component of planned aggregate expenditure is:

Changes in government purchases affect planned spending _____, and changes in taxes and/or transfers affect planned spending _______.

Refer to the figure below. Based on the figure, when PAE = 600 + 0.5Y, short-run equilibrium output equals:

In the short-run Keynesian model where the marginal propensity to consume is 0.5, to offset an expansionary gap resulting from a $1 billion increase in autonomous consumption, government purchases must be:

As disposable income decreases, consumption:

When real output decreases, planned aggregate expenditures decrease because:

A fiscal policy action to close an expansionary gap is to:

In the basic Keynesian model, a tax increase:

Thinking Like an Economist

Comparative Advantage

Spending, Income, and GDP

Inflation and the Price Level

Wages and Unemployment

Economic Growth

Saving, Capital Formation, and Financial Markets

Money, Prices, and the Financial System

Short-Term Economic Fluctuations

Monetary Policy and the Federal Reserve

Aggregate Demand, Aggregate Supply, and Business Cycles

Macroeconomic Policy

Exchange Rates, International Trade, and Capital Flows

Filters

A recession in the United States the demand for exports from Canada resulting in a reduction in Canadian autonomous expenditures and a(n) output gap in Canada.

If short-run equilibrium output equals 50,000 and potential output (Y*) equals 45,000, then this economy has a(n) gap that can be closed by ___.

Changes in government purchases affect planned spending _, and changes in taxes and/or transfers affect planned spending ___.