Exam 8: Aggregate Expenditures

In the simple Keynesian model with no government or foreign sectors, assume that full employment occurs at an output level of $10,000. With a marginal propensity to consume of 0.5 and equilibrium output at $9,600, by how much will investment spending have to increase to move the economy to full employment?

(Multiple Choice)

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Question 21

Along the 45-degree line in the graph of consumption and disposable income

(Multiple Choice)

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Question 22

When the costs of operating machinery rise, new investment will rise.

(True/False)

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Question 23

If Justin spends $35,000 when his income is $60,000, what is his average propensity to save?

(Multiple Choice)

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Question 24

The multiplier effect is a domino effect as income goes from person to person. Explain why this is true.

(Essay)

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Question 25

Keynes believed that more government spending was necessary to solve the unemployment problem created by the Great Depression, since it was unlikely that investment or exports would increase.

(True/False)

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Question 26

A tax increase has a smaller impact on the economy than does a decrease in government spending of the same magnitude because

(Multiple Choice)

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Question 27

If government spending falls and taxes rise, both will _, but the effects of _.

(Multiple Choice)

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Question 28

(Table) When disposable income increases from $1,000 to $1,200, what is the value of the marginal propensity to save?

(Multiple Choice)

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Question 29

In Keynesian macroeconomic equilibrium, AE = Y and C = S.

(True/False)

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Question 30

What share of U.S. GDP is consumption?

(Multiple Choice)

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Question 31

Keynes's insight during the Great Depression was that

(Multiple Choice)

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Question 32

Which factor is NOT a determinant of investment?

(Multiple Choice)

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Question 33

When Tyson's income was $50,000 per year, his consumption was $47,500, and his saving was $2,500. Tyson recently got a $5,000 raise. He raised his consumption to $51,500 and his saving to $3,500. Tyson's marginal propensity to consume is

(Multiple Choice)

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Question 34

The marginal propensity to consume

(Multiple Choice)

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Question 35

Equilibrium in the Keynesian model requires that withdrawals be the same as

(Multiple Choice)

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Question 36

If aggregate expenditures equal $6,200 and aggregate income equals $5,800, businesses will produce

(Multiple Choice)

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Question 37

Assume that the economy includes only consumers and businesses, and is in equilibrium with income equal to $6 million and consumption spending equal to $5 million. Which statement is correct?

(Multiple Choice)

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Question 38

(Table) The following table shows data on consumption at various levels of income. Investment spending is $500 for all levels of income. If there is no government spending or net exports, the equilibrium income level is

(Multiple Choice)

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Question 39

Which country had the lowest national savings rate in 2018?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 276

Along the 45-degree line in the graph of consumption and disposable income

When the costs of operating machinery rise, new investment will rise.

If Justin spends $35,000 when his income is $60,000, what is his average propensity to save?

The multiplier effect is a domino effect as income goes from person to person. Explain why this is true.

Keynes believed that more government spending was necessary to solve the unemployment problem created by the Great Depression, since it was unlikely that investment or exports would increase.

A tax increase has a smaller impact on the economy than does a decrease in government spending of the same magnitude because

If government spending falls and taxes rise, both will _, but the effects of _.

(Table) When disposable income increases from $1,000 to $1,200, what is the value of the marginal propensity to save?

In Keynesian macroeconomic equilibrium, AE = Y and C = S.

What share of U.S. GDP is consumption?

Keynes's insight during the Great Depression was that

Which factor is NOT a determinant of investment?

When Tyson's income was $50,000 per year, his consumption was $47,500, and his saving was $2,500. Tyson recently got a $5,000 raise. He raised his consumption to $51,500 and his saving to $3,500. Tyson's marginal propensity to consume is

The marginal propensity to consume

Equilibrium in the Keynesian model requires that withdrawals be the same as

If aggregate expenditures equal $6,200 and aggregate income equals $5,800, businesses will produce

Assume that the economy includes only consumers and businesses, and is in equilibrium with income equal to $6 million and consumption spending equal to $5 million. Which statement is correct?

(Table) The following table shows data on consumption at various levels of income. Investment spending is $500 for all levels of income. If there is no government spending or net exports, the equilibrium income level is

Which country had the lowest national savings rate in 2018?

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

Filters

Exam 8: Aggregate Expenditures

Along the 45-degree line in the graph of consumption and disposable income

When the costs of operating machinery rise, new investment will rise.

If Justin spends $35,000 when his income is $60,000, what is his average propensity to save?

The multiplier effect is a domino effect as income goes from person to person. Explain why this is true.

Keynes believed that more government spending was necessary to solve the unemployment problem created by the Great Depression, since it was unlikely that investment or exports would increase.

A tax increase has a smaller impact on the economy than does a decrease in government spending of the same magnitude because

If government spending falls and taxes rise, both will _____, but the effects of _____.

(Table) When disposable income increases from $1,000 to $1,200, what is the value of the marginal propensity to save?

In Keynesian macroeconomic equilibrium, AE = Y and C = S.

What share of U.S. GDP is consumption?

Keynes's insight during the Great Depression was that

Which factor is NOT a determinant of investment?

When Tyson's income was $50,000 per year, his consumption was $47,500, and his saving was $2,500. Tyson recently got a $5,000 raise. He raised his consumption to $51,500 and his saving to $3,500. Tyson's marginal propensity to consume is

The marginal propensity to consume

Equilibrium in the Keynesian model requires that withdrawals be the same as

If aggregate expenditures equal $6,200 and aggregate income equals $5,800, businesses will produce

Assume that the economy includes only consumers and businesses, and is in equilibrium with income equal to $6 million and consumption spending equal to $5 million. Which statement is correct?

(Table) The following table shows data on consumption at various levels of income. Investment spending is $500 for all levels of income. If there is no government spending or net exports, the equilibrium income level is

Which country had the lowest national savings rate in 2018?

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

Macroeconomic Policy: Challenges in a Global Economy

International Trade

Open Economy Macroeconomics

Filters

If government spending falls and taxes rise, both will _, but the effects of _.