Exam 13: Consumption and the Aggregate Expenditures Model

Use the following to answer questions Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Suppose AE = C + I_P, and I_P is autonomous.What is the value of autonomous AE?

(Multiple Choice)

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Question 121

If the economy spends 80% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

(Multiple Choice)

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Question 122

Use the following to answer questions Exhibit: Aggregate Expenditures and Real GDP 1 -(Exhibit: Aggregate Expenditures and Real GDP 1) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Suppose AE = C + I_P, and I_P is autonomous.If the level of real GDP equals $5,000 billion, and if there are no changes in the consumption function or in planned investment, then we can expect that, in the next period, real GDP will

(Multiple Choice)

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Question 123

In a graph with real GDP on the horizontal axis and aggregate expenditures on the vertical axis, autonomous aggregate expenditures are represented by

(Multiple Choice)

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Question 124

Use the following to answer questions Exhibit: Consumption Functions Figure 13-3 -An increase in the wealth of households, all other things unchanged, will

(Multiple Choice)

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Question 125

Use the following to answer questions Exhibit: Aggregate Expenditures and Real GDP 2 -(Exhibit: Aggregate Expenditures and Real GDP 2) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment.Consider a simple economy where AE = C + I_P, and I_P is autonomous.What is the value of AE when Y = $12,000 billion?

(Multiple Choice)

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Question 126

A decrease in the price level, all other things unchanged, shifts the aggregate expenditures curve upwards.

(True/False)

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Question 127

Use the following to answer questions Exhibit: Aggregate Expenditures (AE) in a Simplified Economy -(Exhibit: Aggregate Expenditures (AE) In a Simplified Economy) Consider a simple economy that is made up of only two sectors, households and firms, and that investment is autonomous.Further, disposable personal income = real GDP.Suppose that actual real GDP in this economy is $300 billion in a particular period.We would expect to see

(Multiple Choice)

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Question 128

Use the following to answer questions Exhibit: Real GDP and the Multiplier -(Exhibit: Real GDP and the Multiplier) Holding everything else constant, if net exports fall by $400 billion, equilibrium real GDP will decrease

(Multiple Choice)

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Question 129

Use the following to answer questions Exhibit: Consumption and Real GDP -Which of the following statements is false?

(Multiple Choice)

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Question 130

Let AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases.Consider a simple aggregate expenditures model, where AE = C + I_P + G and all components of aggregate expenditures except consumption are autonomous.All other things unchanged, a decrease in the price level

(Multiple Choice)

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Question 131

In graph that shows disposable income on the horizontal axis and consumption on the vertical axis, at every point on the 45-degree line,

(Multiple Choice)

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Question 132

Aggregate expenditures that do not vary with real GDP are called autonomous aggregate expenditures.

(True/False)

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Question 133

Use the following to answer questions Exhibit: Consumption and Real GDP -(Exhibit: Consumption and Real GDP) If real GDP is $4 trillion, consumption equals

(Multiple Choice)

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Question 134

In the aggregate expenditures model, if a $40 billion increase in autonomous investment leads to an increase in equilibrium real GDP of $100 billion at the initial price level, then the multiplier is 2.5.

(True/False)

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Question 135

If real GDP increases from $2,000 to $2,500 and aggregate expenditures increase from $1,900 to $2,200, the slope of the aggregate expenditures curve is

(Multiple Choice)

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Question 136

Use the following to answer questions Exhibit: Aggregate Expenditures Curve Figure 13-6 -(Exhibit: Aggregate Expenditures Curve) Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption, I_P = Planned Investment, G = Government Purchases.Further, I_P and G are autonomous.Suppose government purchases rise by $100.As a result,

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Question 137

Consider a simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption.If the consumption function is C = $500 + 0.8Y, planned investment = $200, government purchases = $300, Net exports = $100, and real GDP = $1,000, what is the amount of autonomous expenditures?

(Multiple Choice)

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Question 138

Use the following to answer questions Exhibit: Consumption and Real GDP -Suppose that your annual income has averaged $40,000 for the past 10 years and that you expect it will average $40,000 over the next 10 years.If your income this year increases to $50,000 and you increase your consumption expenditures by $10,000, then you are most likely acting according to the

(Multiple Choice)

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Question 139

In the aggregate expenditures model, if aggregate expenditures are greater than real GDP,

(Multiple Choice)

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Question 140

Showing 121 - 140 of 214

If the economy spends 80% of any increase in real GDP, then an increase in autonomous investment of $1 billion would result ultimately in an increase in equilibrium real GDP of

In a graph with real GDP on the horizontal axis and aggregate expenditures on the vertical axis, autonomous aggregate expenditures are represented by

Use the following to answer questions Exhibit: Consumption Functions Figure 13-3 -An increase in the wealth of households, all other things unchanged, will

A decrease in the price level, all other things unchanged, shifts the aggregate expenditures curve upwards.

Use the following to answer questions Exhibit: Real GDP and the Multiplier -(Exhibit: Real GDP and the Multiplier) Holding everything else constant, if net exports fall by $400 billion, equilibrium real GDP will decrease

Use the following to answer questions Exhibit: Consumption and Real GDP -Which of the following statements is false?

In graph that shows disposable income on the horizontal axis and consumption on the vertical axis, at every point on the 45-degree line,

Aggregate expenditures that do not vary with real GDP are called autonomous aggregate expenditures.

Use the following to answer questions Exhibit: Consumption and Real GDP -(Exhibit: Consumption and Real GDP) If real GDP is $4 trillion, consumption equals

In the aggregate expenditures model, if a $40 billion increase in autonomous investment leads to an increase in equilibrium real GDP of $100 billion at the initial price level, then the multiplier is 2.5.

If real GDP increases from $2,000 to $2,500 and aggregate expenditures increase from $1,900 to $2,200, the slope of the aggregate expenditures curve is

In the aggregate expenditures model, if aggregate expenditures are greater than real GDP,

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

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