Exam 5: Foundations of the Macroeconomy

Which of the following statements about theories explaining why an economy expands or contracts is FALSE?

Why are tax payments considered to be leakages from the spending stream even though they provide money for government to spend?

If nonincome-determined spending increases by $40 billion, and 80 percent of additional income received is spent, the level of economic activity will increase by:

The sequence of events in a recession can be categorized as:

When the real output of an economy rises during a business cycle, the economy is:

Which of the following statements is FALSE?

Increases in the level of total spending in the economy:

Financial institutions:

Injections into the spending stream come from:

Aggregate, or total, spending is the combined spending for new goods and services of all:

The four phases of a business cycle, in correct order, are:

What is the basic cause of changes in the level of economic activity?

Recurring periods of expansion and contraction in an economy's real output are called __________ __________.

An increase in U.S. purchases of foreign-built automobiles would increase U.S.:

If the percent of additional income not spent is 20%, and businesses expand their investment spending by $1,000,000, the economy will grow by $5,000,000.

Government economic policy should stimulate the economy during:

For households, injections into the spending stream are ________, while leakages from spending are ___________.

How much would total output change if 25 percent of additional income was not spent and exports went up by $50 billion?

You would expect economic activity to increase if investment spending, spending from borrowing and transfer payments, government purchases, and exports were:

Leakages include: