Question 1

A general formula for the multiplier is

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)    C

Question 2

What was the key factor leading to the growth of steel production capacity in GCC countries after 2004?

Accepted Answer

A)  The downturn in the economic cycle 
B)  The boom in the construction industry 
C)  Low costs for fuel 
D)  Lack of indigenous iron ore 
A)  The downturn in the economic cycle 
B)  The boom in the construction industry 
C)  Low costs for fuel 
D)  Lack of indigenous iron ore B

Question 3

Given the equations for C, I, G, and NX below, what is the equilibrium level of GDP?
C = 1,000 + 0.8Y
I = 1,500
G = 1,250
NX = 100

Accepted Answer

A)  $3,080 
B)  $6,930 
C)  $3,850 
D)  $19,250 
A)  $3,080 
B)  $6,930 
C)  $3,850 
D)  $19,250 D

Question 4

Dell holds no inventories of finished computers. When they receive orders from customers, Dell quickly communicates those orders with its suppliers and closely monitors their suppliers' ability to fill orders promptly. This system is called

Accepted Answer

A)  supply chain management. 
B)  a reverse linkage relationship. 
C)  prorated inventory programming. 
D)  computer monitoring production. 
A)  supply chain management. 
B)  a reverse linkage relationship. 
C)  prorated inventory programming. 
D)  computer monitoring production.

Question 5

Oil prices dropped sharply from a peak of US$147 per barrel in August 2008 to a low price of US$30 by the end of the same year. This resulted in a sharp decrease in Arab Gulf government's revenues. These governments responded by:

Accepted Answer

A)  increasing government spending to overcome a recession. 
B)  it was not clear how these governments responded. 
C)  reducing government spending because of the crisis. 
D)  keeping government spending in its level before the crisis. 
A)  increasing government spending to overcome a recession. 
B)  it was not clear how these governments responded. 
C)  reducing government spending because of the crisis. 
D)  keeping government spending in its level before the crisis.

Question 6

When firms are faced by a decline in demand for their products, resulting in an unexpected increase in inventories. This event results from

Accepted Answer

A)  macroeconomic equilibrium. 
B)  spending that is greater production. 
C)  aggregate expenditure that is less than GDP. 
D)  aggregate expenditure that is greater than GDP. 
A)  macroeconomic equilibrium. 
B)  spending that is greater production. 
C)  aggregate expenditure that is less than GDP. 
D)  aggregate expenditure that is greater than GDP.

Question 7

If the consumption function is defined as C = 5,500 + .9Y, what is the autonomous level of consumption expenditure?

Accepted Answer

A)  $6,050 
B)  $5,500 
C)  $4,950 
D)  $6,111 
A)  $6,050 
B)  $5,500 
C)  $4,950 
D)  $6,111

Question 8

Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $21,500, what is the marginal propensity to consume?
C = 1,500 + (MPC)Y
I = 1,000
G = 2,000
NX = -200

Accepted Answer

A)  0.9 
B)  0.8 
C)  0.67 
D)  0.75 
A)  0.9 
B)  0.8 
C)  0.67 
D)  0.75

Question 9

Oil prices dropped sharply from a peak of US$147 per barrel in August 2008 to a low price of US$30 by the end of the same year. Despite a decreased government revenues, the governments of the Arab Gulf countries increased their spending. What was the logic behind their move?

Accepted Answer

A)  Governments' demand for goods and services was increased for social and political purposes. 
B)  Governments' demand for goods and services was increased to prevent sharp price increases 
C)  Government spending -increased to compensate for the fall in private consumption and investment expenditures. 
D)  There was no logic behind what the Arab Gulf governments did. 
A)  Governments' demand for goods and services was increased for social and political purposes. 
B)  Governments' demand for goods and services was increased to prevent sharp price increases 
C)  Government spending -increased to compensate for the fall in private consumption and investment expenditures. 
D)  There was no logic behind what the Arab Gulf governments did.

Question 10

Which of the following is a reason why increases in the price level results in a decline in aggregate expenditure?

Accepted Answer

A)  Price level increases relative to other countries raise net exports, which lowers aggregate expenditures. 
B)  Price level increases cause firms and consumers to hold more money, which raises the interest rate. Higher interest rates lower consumption and planned investment expenditures, which lowers aggregate expenditures. 
C)  Price level increases raise real wealth which causes consumption spending and aggregate expenditures to decline. 
D)  As the price level rises, government spending falls, which lowers aggregate expenditures. 
A)  Price level increases relative to other countries raise net exports, which lowers aggregate expenditures. 
B)  Price level increases cause firms and consumers to hold more money, which raises the interest rate. Higher interest rates lower consumption and planned investment expenditures, which lowers aggregate expenditures. 
C)  Price level increases raise real wealth which causes consumption spending and aggregate expenditures to decline. 
D)  As the price level rises, government spending falls, which lowers aggregate expenditures.

Question 11

In the wake of the global crisis, the layoffs in the Gulf threatened to send many Jordanian workers home. Some economists see this as an opportunity for the Jordanian economy. Why?

Accepted Answer

A)  The Jordanian workers can earn higher wages in Jordan. 
B)  The government will subsidize the wages of these workers to reduce unemployment. 
C)  These workers are expected to spend their saved incomes inside the country, creating a new wave of demand, increasing growth prospects of the Jordanian economy. 
D)  None of the above. 
A)  The Jordanian workers can earn higher wages in Jordan. 
B)  The government will subsidize the wages of these workers to reduce unemployment. 
C)  These workers are expected to spend their saved incomes inside the country, creating a new wave of demand, increasing growth prospects of the Jordanian economy. 
D)  None of the above.

Question 12

If the marginal propensity to consume is .75, the marginal propensity to save is

Accepted Answer

A)  .25. 
B)  3. 
C)  1. 
D)  .5. 
A)  .25. 
B)  3. 
C)  1. 
D)  .5.

Question 13

If consumption is defined as C = 2,000 + 0.8Y, then the marginal propensity to save is 0.8.

Accepted Answer

A) True 
 B)False

A general formula for the multiplier is

What was the key factor leading to the growth of steel production capacity in GCC countries after 2004?

Given the equations for C, I, G, and NX below, what is the equilibrium level of GDP? C = 1,000 + 0.8Y I = 1,500 G = 1,250 NX = 100

Dell holds no inventories of finished computers. When they receive orders from customers, Dell quickly communicates those orders with its suppliers and closely monitors their suppliers' ability to fill orders promptly. This system is called

Oil prices dropped sharply from a peak of US$147 per barrel in August 2008 to a low price of US$30 by the end of the same year. This resulted in a sharp decrease in Arab Gulf government's revenues. These governments responded by:

When firms are faced by a decline in demand for their products, resulting in an unexpected increase in inventories. This event results from

If the consumption function is defined as C = 5,500 + .9Y, what is the autonomous level of consumption expenditure?

Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $21,500, what is the marginal propensity to consume? C = 1,500 + (MPC)Y I = 1,000 G = 2,000 NX = -200

Oil prices dropped sharply from a peak of US$147 per barrel in August 2008 to a low price of US$30 by the end of the same year. Despite a decreased government revenues, the governments of the Arab Gulf countries increased their spending. What was the logic behind their move?

Which of the following is a reason why increases in the price level results in a decline in aggregate expenditure?

In the wake of the global crisis, the layoffs in the Gulf threatened to send many Jordanian workers home. Some economists see this as an opportunity for the Jordanian economy. Why?

If the marginal propensity to consume is .75, the marginal propensity to save is

If consumption is defined as C = 2,000 + 0.8Y, then the marginal propensity to save is 0.8.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Elasticity: The Responsiveness of Demand and Supply

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: The Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

Externalities, Environmental Policy, and Public Goods

Comparative Advantage and the Gains From International Trade Macro

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Unemployment and Inflation

The Markets for Labor and Other Factors of Production

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Central Bank

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Central Bank Policy

Macroeconomics in an Open Economy

Filters

Exam 19: Output and Expenditure in the Short Run

A general formula for the multiplier is

What was the key factor leading to the growth of steel production capacity in GCC countries after 2004?

Given the equations for C, I, G, and NX below, what is the equilibrium level of GDP? C = 1,000 + 0.8Y I = 1,500 G = 1,250 NX = 100

Dell holds no inventories of finished computers. When they receive orders from customers, Dell quickly communicates those orders with its suppliers and closely monitors their suppliers' ability to fill orders promptly. This system is called

Oil prices dropped sharply from a peak of US$147 per barrel in August 2008 to a low price of US$30 by the end of the same year. This resulted in a sharp decrease in Arab Gulf government's revenues. These governments responded by:

When firms are faced by a decline in demand for their products, resulting in an unexpected increase in inventories. This event results from

If the consumption function is defined as C = 5,500 + .9Y, what is the autonomous level of consumption expenditure?

Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $21,500, what is the marginal propensity to consume? C = 1,500 + (MPC)Y I = 1,000 G = 2,000 NX = -200

Oil prices dropped sharply from a peak of US$147 per barrel in August 2008 to a low price of US$30 by the end of the same year. Despite a decreased government revenues, the governments of the Arab Gulf countries increased their spending. What was the logic behind their move?

Which of the following is a reason why increases in the price level results in a decline in aggregate expenditure?

In the wake of the global crisis, the layoffs in the Gulf threatened to send many Jordanian workers home. Some economists see this as an opportunity for the Jordanian economy. Why?

If the marginal propensity to consume is .75, the marginal propensity to save is

If consumption is defined as C = 2,000 + 0.8Y, then the marginal propensity to save is 0.8.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Elasticity: The Responsiveness of Demand and Supply

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: The Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

Externalities, Environmental Policy, and Public Goods

Comparative Advantage and the Gains From International Trade Macro

GDP: Measuring Total Production and Income

Economic Growth, the Financial System, and Business Cycles

Unemployment and Inflation

The Markets for Labor and Other Factors of Production

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Central Bank

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Central Bank Policy

Macroeconomics in an Open Economy

Filters