Question 1

The book that is the basis for modern macroeconomic theory is

Accepted Answer

A)  The Wealth of Nations. 
B)  Principles of Political Economy. 
C)  The General History of Money and Banking. 
D)  The General Theory of Employment, Interest, and Money. 
A)  The Wealth of Nations. 
B)  Principles of Political Economy. 
C)  The General History of Money and Banking. 
D)  The General Theory of Employment, Interest, and Money.

Question 2

What is disposable income? How is it calculated?

Accepted Answer

Disposable income (DI)is the sum of the

Question 3

Define investment?
The meaning of investment is different for economists.Explain.

Accepted Answer

Investment is an asset or item that is p

Question 4

Which of the following transactions is included in GDP?

Accepted Answer

A)  You buy a used car for $10,000. 
B)  An unemployed worker receives a check for $450 as unemployment benefits. 
C)  You buy a one-acre lot in Florida where you plan to build a beach house. 
D)  Toyota builds 1,000 Accords in Kentucky at a cost of $25,000 each but is unable to sell them and, therefore, they are added to inventory. 
A)  You buy a used car for $10,000. 
B)  An unemployed worker receives a check for $450 as unemployment benefits. 
C)  You buy a one-acre lot in Florida where you plan to build a beach house. 
D)  Toyota builds 1,000 Accords in Kentucky at a cost of $25,000 each but is unable to sell them and, therefore, they are added to inventory.

Question 5

Discuss the major determinants of net exports.

Accepted Answer

National incomes: Although both exports

Question 6

The relationship between consumer spending and disposable income is called the

Accepted Answer

A)  conjunction function. 
B)  consumption function. 
C)  aggregate demand function. 
D)  marginal spending function. 
A)  conjunction function. 
B)  consumption function. 
C)  aggregate demand function. 
D)  marginal spending function.

Question 7

If households decrease the amount of bank account withdrawals,the consumption function may shift upward.

Accepted Answer

A) True 
 B)False

Question 8

Disposable income can be defined as national product

Accepted Answer

A)  minus federal and state taxes. 
B)  minus taxes plus transfers. 
C)  minus indirect taxes. 
D)  plus taxes plus transfers. 
A)  minus federal and state taxes. 
B)  minus taxes plus transfers. 
C)  minus indirect taxes. 
D)  plus taxes plus transfers.

Question 9

In which of the following years was a tax cut ineffective in stimulating aggregate demand?

Accepted Answer

A)  1964 
B)  1975 
C)  1981 
D)  1999 
A)  1964 
B)  1975 
C)  1981 
D)  1999

Question 10

Financial investments,such as mutual fund purchases,are included in the national income component.

Accepted Answer

A) True 
 B)False

Question 11

Changes in the value of stocks may play a big role in the consumption decisions of individuals.How would changes in the stock market affect the consumption function?

Accepted Answer

Corporate stocks are an increasingly pop

Question 12

The government component (G)of total output includes goods and services purchased by

Accepted Answer

A)  the federal government plus transfer payments. 
B)  all government institutions plus transfer payments. 
C)  all government institutions. 
D)  all government institutions plus tax revenues. 
A)  the federal government plus transfer payments. 
B)  all government institutions plus transfer payments. 
C)  all government institutions. 
D)  all government institutions plus tax revenues.

Question 13

The purchase of a new house is included in government spending.

Accepted Answer

A) True 
 B)False

Question 14

If Kobe,an NBA star athlete,earns $10 million per year but has no money in the bank,he has a

Accepted Answer

A)  high income and high wealth. 
B)  low income and high wealth. 
C)  high income and low wealth. 
D)  low income and low wealth. 
A)  high income and high wealth. 
B)  low income and high wealth. 
C)  high income and low wealth. 
D)  low income and low wealth.

Question 15

U.S.imports are most likely to increase when

Accepted Answer

A)  U.S. GDP decreases. 
B)  U.S. unemployment rates fall. 
C)  U.S. prices fall. 
D)  foreign prices rise. 
A)  U.S. GDP decreases. 
B)  U.S. unemployment rates fall. 
C)  U.S. prices fall. 
D)  foreign prices rise.

Question 16

Government purchases are included in national product.

Accepted Answer

A) True 
 B)False

Question 17

When the price level falls,consumers may feel wealthier and the consumption function will shift upward.

Accepted Answer

A) True 
 B)False

Question 18

Changes in the price level affect household wealth more than household income.

Accepted Answer

A) True 
 B)False

Question 19

Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following will most likely cause a shift in the consumption function?

Accepted Answer

A)  a change in consumer confidence 
B)  a change in national output 
C)  a change in real GDP 
D)  a change in disposable income 
A)  a change in consumer confidence 
B)  a change in national output 
C)  a change in real GDP 
D)  a change in disposable income

The book that is the basis for modern macroeconomic theory is

What is disposable income? How is it calculated?

Define investment? The meaning of investment is different for economists.Explain.

Which of the following transactions is included in GDP?

Discuss the major determinants of net exports.

The relationship between consumer spending and disposable income is called the

If households decrease the amount of bank account withdrawals,the consumption function may shift upward.

Disposable income can be defined as national product

In which of the following years was a tax cut ineffective in stimulating aggregate demand?

Financial investments,such as mutual fund purchases,are included in the national income component.

Changes in the value of stocks may play a big role in the consumption decisions of individuals.How would changes in the stock market affect the consumption function?

The government component (G)of total output includes goods and services purchased by

The purchase of a new house is included in government spending.

If Kobe,an NBA star athlete,earns $10 million per year but has no money in the bank,he has a

U.S.imports are most likely to increase when

Government purchases are included in national product.

When the price level falls,consumers may feel wealthier and the consumption function will shift upward.

Changes in the price level affect household wealth more than household income.

Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary.

Which of the following will most likely cause a shift in the consumption function?

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 book that is the basis for modern macroeconomic theory is

What is disposable income? How is it calculated?

Define investment? The meaning of investment is different for economists.Explain.

Which of the following transactions is included in GDP?

Discuss the major determinants of net exports.

The relationship between consumer spending and disposable income is called the

If households decrease the amount of bank account withdrawals,the consumption function may shift upward.

Disposable income can be defined as national product

In which of the following years was a tax cut ineffective in stimulating aggregate demand?

Financial investments,such as mutual fund purchases,are included in the national income component.

Changes in the value of stocks may play a big role in the consumption decisions of individuals.How would changes in the stock market affect the consumption function?

The government component (G)of total output includes goods and services purchased by

The purchase of a new house is included in government spending.

If Kobe,an NBA star athlete,earns $10 million per year but has no money in the bank,he has a

U.S.imports are most likely to increase when

Government purchases are included in national product.

When the price level falls,consumers may feel wealthier and the consumption function will shift upward.

Changes in the price level affect household wealth more than household income.

Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary.

Which of the following will most likely cause a shift in the consumption function?

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