Question 1

The sum of all factor payments in the economy yields

Accepted Answer

A)  gross domestic product. 
B)  national income. 
C)  disposable income. 
D)  net domestic product. 
A)  gross domestic product. 
B)  national income. 
C)  disposable income. 
D)  net domestic product.

Question 2

The one category of goods that are not sold but are,nevertheless,included in GDP is

Accepted Answer

A)  inventories. 
B)  imports. 
C)  consumer services. 
D)  exports. 
A)  inventories. 
B)  imports. 
C)  consumer services. 
D)  exports.

Question 3

If income in Austria decreases by 30 million euros and consumption decreases by 24 euros,then the MPC equals

Accepted Answer

A) 0.90. 
B) 0.80. 
C) 0.60 
D) -0.60. 
A) 0.90. 
B) 0.80. 
C) 0.60 
D) -0.60.

Question 4

National income can be calculated by subtracting

Accepted Answer

A)  depreciation from GDP. 
B)  indirect business taxes from GDP. 
C)  depreciation and indirect business taxes from GDP. 
D)  transfer payments and taxes from GDP. 
A)  depreciation from GDP. 
B)  indirect business taxes from GDP. 
C)  depreciation and indirect business taxes from GDP. 
D)  transfer payments and taxes from GDP.

Question 5

If consumers receive an increase in income of $1,000,their spending will increase by a smaller amount.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the best example of an intermediate good?

Accepted Answer

A)  a tire purchased by an auto company 
B)  a new house purchased by a newly married couple 
C)  grain sold to foreign farmers 
D)  All of the above are intermediate goods. 
A)  a tire purchased by an auto company 
B)  a new house purchased by a newly married couple 
C)  grain sold to foreign farmers 
D)  All of the above are intermediate goods.

Question 7

A major employer in a small town announces upcoming major layoffs of employees.What should we expect to happen to the consumption functions of the affected employees?

Accepted Answer

A)  the consumption functions will shift upward. 
B)  most employees will move upward along their consumption functions 
C)  the consumption functions will shift downward 
D)  most employees will move downward along their consumption functions 
A)  the consumption functions will shift upward. 
B)  most employees will move upward along their consumption functions 
C)  the consumption functions will shift downward 
D)  most employees will move downward along their consumption functions

Question 8

Melissa purchases shares in a government bond mutual fund.Is this included in the aggregate demand component "Investment"?

Accepted Answer

A)  Yes, if it is a domestic mutual fund. 
B)  Yes, if the purchase is made out of current income. 
C)  No, unless the funds are deposited in a domestic financial institution. 
D)  No, it would never be included. 
A)  Yes, if it is a domestic mutual fund. 
B)  Yes, if the purchase is made out of current income. 
C)  No, unless the funds are deposited in a domestic financial institution. 
D)  No, it would never be included.

Question 9

The accounting identity for the economy's factor payments can be written as ____.

Accepted Answer

A)  GDP = wages + interest + rents + profits 
B)  GDP = consumption + investment + government + intermediate goods + net exports 
C)  GDP = wages + interest + rents + net exports 
D)  GDP = wages + interest + rents + saving + investment 
A)  GDP = wages + interest + rents + profits 
B)  GDP = consumption + investment + government + intermediate goods + net exports 
C)  GDP = wages + interest + rents + net exports 
D)  GDP = wages + interest + rents + saving + investment

Question 10

To get a complete measure of the total spending on U.S.-produced final goods and services,one must adjust aggregate demand by

Accepted Answer

A)  adding imports and subtracting exports. 
B)  adding imports that are purchased by U.S. consumers. 
C)  adding exports and subtracting imports. 
D)  subtracting exports sold to foreigners. 
A)  adding imports and subtracting exports. 
B)  adding imports that are purchased by U.S. consumers. 
C)  adding exports and subtracting imports. 
D)  subtracting exports sold to foreigners.

Question 11

Scatter diagrams are a useful way to depict the relationship between two variables.

Accepted Answer

A) True 
 B)False

Question 12

If the consumption function shifts downward,which of the following is the most likely cause?

Accepted Answer

A)  Consumers become more optimistic. 
B)  The price level increased. 
C)  Consumers' incomes increase. 
D)  Real interest rates decrease. 
A)  Consumers become more optimistic. 
B)  The price level increased. 
C)  Consumers' incomes increase. 
D)  Real interest rates decrease.

Question 13

To economists,investment means buying stocks and bonds.

Accepted Answer

A) True 
 B)False

Question 14

If a U.S.citizen buys a car produced in Germany,this transaction will add to

Accepted Answer

A)  U.S. aggregate demand. 
B)  U.S. aggregate supply. 
C)  German aggregate demand. 
D)  German imports. 
A)  U.S. aggregate demand. 
B)  U.S. aggregate supply. 
C)  German aggregate demand. 
D)  German imports.

Question 15

Both President Bush and President Obama wanted tax cuts to stimulate consumer spending during the 2007-2009 recession.

Accepted Answer

A) True 
 B)False

Question 16

Figure 8-1
  
-Based on the scatter diagram in Figure 8-1,if real disposable income is $800 billion,the consumption spending would be approximately

Accepted Answer

A)  $800 billion. 
B)  $650 billion. 
C)  $540 billion. 
D)  $420 billion. 
A)  $800 billion. 
B)  $650 billion. 
C)  $540 billion. 
D)  $420 billion.

Question 17

If personal taxes are increased by $10 billion,we can expect that consumers will reduce

Accepted Answer

A)  spending by $10 billion. 
B)  spending by more than $10 billion. 
C)  spending by less than $10 billion. 
D)  saving by $10 billion. 
E)  saving by more than $10 billion. 
A)  spending by $10 billion. 
B)  spending by more than $10 billion. 
C)  spending by less than $10 billion. 
D)  saving by $10 billion. 
E)  saving by more than $10 billion.

Question 18

National income is the sum of

Accepted Answer

A)  wages and profits. 
B)  wages, interest, profits, and rent. 
C)  interest and rent. 
D)  wages, transfer payments, and tax revenues. 
A)  wages and profits. 
B)  wages, interest, profits, and rent. 
C)  interest and rent. 
D)  wages, transfer payments, and tax revenues.

Question 19

The majority of payments made by the federal government are for

Accepted Answer

A)  transfer payments. 
B)  administrative expenses. 
C)  foreign aid. 
D)  defense purchases 
A)  transfer payments. 
B)  administrative expenses. 
C)  foreign aid. 
D)  defense purchases

Question 20

The equation representing the final demand approach to calculating GDP is

Accepted Answer

A)  Y = C + I + X + IM. 
B)  Y = C + I + G. 
C)  Y = G + I + X − IM. 
D)  Y = C+ I + G + (X − IM). 
A)  Y = C + I + X + IM. 
B)  Y = C + I + G. 
C)  Y = G + I + X − IM. 
D)  Y = C+ I + G + (X − IM).

The sum of all factor payments in the economy yields

The one category of goods that are not sold but are,nevertheless,included in GDP is

If income in Austria decreases by 30 million euros and consumption decreases by 24 euros,then the MPC equals

National income can be calculated by subtracting

If consumers receive an increase in income of $1,000,their spending will increase by a smaller amount.

Which of the following is the best example of an intermediate good?

A major employer in a small town announces upcoming major layoffs of employees.What should we expect to happen to the consumption functions of the affected employees?

Melissa purchases shares in a government bond mutual fund.Is this included in the aggregate demand component "Investment"?

The accounting identity for the economy's factor payments can be written as ____.

To get a complete measure of the total spending on U.S.-produced final goods and services,one must adjust aggregate demand by

Scatter diagrams are a useful way to depict the relationship between two variables.

If the consumption function shifts downward,which of the following is the most likely cause?

To economists,investment means buying stocks and bonds.

If a U.S.citizen buys a car produced in Germany,this transaction will add to

Both President Bush and President Obama wanted tax cuts to stimulate consumer spending during the 2007-2009 recession.

Figure 8-1 -Based on the scatter diagram in Figure 8-1,if real disposable income is $800 billion,the consumption spending would be approximately

If personal taxes are increased by $10 billion,we can expect that consumers will reduce

National income is the sum of

The majority of payments made by the federal government are for

The equation representing the final demand approach to calculating GDP is

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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Exam 8: Aggregate Demand and the Powerful Consumer

The sum of all factor payments in the economy yields

The one category of goods that are not sold but are,nevertheless,included in GDP is

If income in Austria decreases by 30 million euros and consumption decreases by 24 euros,then the MPC equals

National income can be calculated by subtracting

If consumers receive an increase in income of $1,000,their spending will increase by a smaller amount.

Which of the following is the best example of an intermediate good?

A major employer in a small town announces upcoming major layoffs of employees.What should we expect to happen to the consumption functions of the affected employees?

Melissa purchases shares in a government bond mutual fund.Is this included in the aggregate demand component "Investment"?

The accounting identity for the economy's factor payments can be written as ____.

To get a complete measure of the total spending on U.S.-produced final goods and services,one must adjust aggregate demand by

Scatter diagrams are a useful way to depict the relationship between two variables.

If the consumption function shifts downward,which of the following is the most likely cause?

To economists,investment means buying stocks and bonds.

If a U.S.citizen buys a car produced in Germany,this transaction will add to

Both President Bush and President Obama wanted tax cuts to stimulate consumer spending during the 2007-2009 recession.

Figure 8-1 -Based on the scatter diagram in Figure 8-1,if real disposable income is $800 billion,the consumption spending would be approximately

If personal taxes are increased by $10 billion,we can expect that consumers will reduce

National income is the sum of

The majority of payments made by the federal government are for

The equation representing the final demand approach to calculating GDP is

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters