Question 1

The multiplier means that an increase in investment results in ________ aggregate expenditure that is ________ the increase in investment.

Accepted Answer

A) decreased;larger than 
B) increased;smaller than 
C) decreased;smaller than 
D) increased;larger than 
E) increased;the same size as 
A) decreased;larger than 
B) increased;smaller than 
C) decreased;smaller than 
D) increased;larger than 
E) increased;the same size as D

Question 2

-The above table gives data for the nation of Mojo.At what level of real GDP is the unplanned inventory change equal to $1.75 trillion?

Accepted Answer

A) $6.0 trillion 
B) $0.0 trillion 
C) $12.0 trillion 
D) $3.0 trillion 
E) $9.0 trillion 
A) $6.0 trillion 
B) $0.0 trillion 
C) $12.0 trillion 
D) $3.0 trillion 
E) $9.0 trillion E

Question 3

An increase in the price level shifts the AE curve

Accepted Answer

A) downward and does not shift the AD curve. 
B) downward and shifts the AD curve rightward. 
C) upward and shifts the AD curve rightward. 
D) downward and shifts the AD curve leftward. 
E) upward and shifts the AD curve leftward. 
A) downward and does not shift the AD curve. 
B) downward and shifts the AD curve rightward. 
C) upward and shifts the AD curve rightward. 
D) downward and shifts the AD curve leftward. 
E) upward and shifts the AD curve leftward. A

Question 4

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The equilibrium expenditure is

Accepted Answer

A) $15 billion. 
B) $30 billion. 
C) $10 billion. 
D) $20 billion. 
E) $25 billion. 
A) $15 billion. 
B) $30 billion. 
C) $10 billion. 
D) $20 billion. 
E) $25 billion.

Question 5

Which of the following affects the magnitude of the multiplier?
i.Marginal propensity to consume
ii.Marginal propensity to invest
iii.Marginal tax rate

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) i,ii and iii 
A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) i,ii and iii

Question 6

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.Unplanned inventory changes equal $50 billion when real GDP equals

Accepted Answer

A) $900 billion. 
B) $300 billion. 
C) $700 billion. 
D) $500 billion. 
E) $800 billion. 
A) $900 billion. 
B) $300 billion. 
C) $700 billion. 
D) $500 billion. 
E) $800 billion.

Question 7

If the MPC is 0.6 and there are no imports or income taxes,the multiplier is

Accepted Answer

A) 1.7. 
B) 6. 
C) 0.4. 
D) 0.6. 
E) 2.5. 
A) 1.7. 
B) 6. 
C) 0.4. 
D) 0.6. 
E) 2.5.

Question 8

When the AE line lies above the 45° line,

Accepted Answer

A) there are unplanned increases in inventories. 
B) there are unplanned decreases in inventories. 
C) real GDP exceeds aggregate planned expenditure. 
D) aggregate planned expenditure is less than real GDP. 
E) the price level is rising. 
A) there are unplanned increases in inventories. 
B) there are unplanned decreases in inventories. 
C) real GDP exceeds aggregate planned expenditure. 
D) aggregate planned expenditure is less than real GDP. 
E) the price level is rising.

Question 9

If the price level increases,the AE curve shifts

Accepted Answer

A) upward and there is a movement along the AD curve. 
B) upward and the AD curve shifts leftward. 
C) downward and there is a movement along the AD curve. 
D) upward and the AD curve shifts rightward. 
E) downward and the AD curve shifts rightward. 
A) upward and there is a movement along the AD curve. 
B) upward and the AD curve shifts leftward. 
C) downward and there is a movement along the AD curve. 
D) upward and the AD curve shifts rightward. 
E) downward and the AD curve shifts rightward.

Question 10

Disposable income equals aggregate income

Accepted Answer

A) minus net taxes. 
B) plus saving minus net taxes. 
C) plus net taxes. 
D) minus saving. 
E) minus saving and minus net taxes. 
A) minus net taxes. 
B) plus saving minus net taxes. 
C) plus net taxes. 
D) minus saving. 
E) minus saving and minus net taxes.

Question 11

During 2015,a country reports aggregate planned expenditures of $5 trillion and an actual real GDP of $4 trillion.During 2015,

Accepted Answer

A) inventories are unaffected. 
B) actual aggregate expenditures are greater than real GDP. 
C) actual aggregate expenditures are less than real GDP. 
D) inventories are less than planned. 
E) inventories are greater than planned. 
A) inventories are unaffected. 
B) actual aggregate expenditures are greater than real GDP. 
C) actual aggregate expenditures are less than real GDP. 
D) inventories are less than planned. 
E) inventories are greater than planned.

Question 12

________ can trigger a recession.

Accepted Answer

A) Equality between aggregate expenditure and real GDP 
B) An increase in the expenditure multiplier 
C) An increase in autonomous expenditure 
D) A decrease in autonomous expenditure 
E) An increase in induced expenditure 
A) Equality between aggregate expenditure and real GDP 
B) An increase in the expenditure multiplier 
C) An increase in autonomous expenditure 
D) A decrease in autonomous expenditure 
E) An increase in induced expenditure

Question 13

The quantity of Australian exports is determined by

Accepted Answer

A) political factors. 
B) Australian aggregate expenditure. 
C) Australian consumption expenditure. 
D) Australian real GDP. 
E) aggregate incomes in the rest of the world. 
A) political factors. 
B) Australian aggregate expenditure. 
C) Australian consumption expenditure. 
D) Australian real GDP. 
E) aggregate incomes in the rest of the world.

Question 14

In Germany,expected future income increased during 2014.This increase led to

Accepted Answer

A) a downward shift of the consumption function. 
B) no movement along the consumption function and no shift of the consumption function. 
C) a movement upward along the consumption function. 
D) a movement downward along the consumption function. 
E) an upward shift of the consumption function. 
A) a downward shift of the consumption function. 
B) no movement along the consumption function and no shift of the consumption function. 
C) a movement upward along the consumption function. 
D) a movement downward along the consumption function. 
E) an upward shift of the consumption function.

Question 15

-The above table has data from the nation of Atlantica.Based on these data,when disposable income equals 8.0 there is

Accepted Answer

A) savings of $0.5 trillion. 
B) dissavings of $15.5 trillion. 
C) dissavings of $7.5 trillion. 
D) dissavings of $0.5 trillion. 
E) savings of $15.5 trillion. 
A) savings of $0.5 trillion. 
B) dissavings of $15.5 trillion. 
C) dissavings of $7.5 trillion. 
D) dissavings of $0.5 trillion. 
E) savings of $15.5 trillion.

Question 16

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The marginal propensity to consume in Syldavia is equal to

Accepted Answer

A) 5.00. 
B) 0.20. 
C) 0.40. 
D) 0.80. 
E) 0.75. 
A) 5.00. 
B) 0.20. 
C) 0.40. 
D) 0.80. 
E) 0.75.

Question 17

If aggregate planned expenditure equals GDP,then

Accepted Answer

A) firms' inventories exceed planned inventories. 
B) firms' inventories equal planned inventories. 
C) firms' inventories are less than planned inventories. 
D) firms' actual investment has no relationship to its planned investment. 
E) firms do not have any inventories. 
A) firms' inventories exceed planned inventories. 
B) firms' inventories equal planned inventories. 
C) firms' inventories are less than planned inventories. 
D) firms' actual investment has no relationship to its planned investment. 
E) firms do not have any inventories.

Question 18

-The table above gives data for the nation of Mosh.In Mosh,equilibrium expenditure equals

Accepted Answer

A) $4 trillion. 
B) $9 trillion. 
C) $6 trillion. 
D) $10 trillion. 
E) $7 trillion. 
A) $4 trillion. 
B) $9 trillion. 
C) $6 trillion. 
D) $10 trillion. 
E) $7 trillion.

Question 19

-The above table has data from the nation of Media.Based on these data,the marginal propensity to consume is

Accepted Answer

A) 0.67. 
B) 1.33. 
C) 0.25. 
D) 0.75. 
E) 1.50. 
A) 0.67. 
B) 1.33. 
C) 0.25. 
D) 0.75. 
E) 1.50.

Question 20

-The table above gives data for the nation of Mosh.If real GDP is $6 trillion,then

Accepted Answer

A) firms decrease production because inventories exceed their target levels. 
B) firms increase production because inventories exceed their target levels. 
C) firms increase production because inventories are less than their target levels. 
D) the economy has reached equilibrium and no change in production will occur. 
E) We need more information to determine whether firms increase,decrease or do not change their production. 
A) firms decrease production because inventories exceed their target levels. 
B) firms increase production because inventories exceed their target levels. 
C) firms increase production because inventories are less than their target levels. 
D) the economy has reached equilibrium and no change in production will occur. 
E) We need more information to determine whether firms increase,decrease or do not change their production.

The multiplier means that an increase in investment results in aggregate expenditure that is the increase in investment.

-The above table gives data for the nation of Mojo.At what level of real GDP is the unplanned inventory change equal to $1.75 trillion?

An increase in the price level shifts the AE curve

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The equilibrium expenditure is

Which of the following affects the magnitude of the multiplier? i.Marginal propensity to consume ii.Marginal propensity to invest iii.Marginal tax rate

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.Unplanned inventory changes equal $50 billion when real GDP equals

If the MPC is 0.6 and there are no imports or income taxes,the multiplier is

When the AE line lies above the 45° line,

If the price level increases,the AE curve shifts

Disposable income equals aggregate income

During 2015,a country reports aggregate planned expenditures of $5 trillion and an actual real GDP of $4 trillion.During 2015,

________ can trigger a recession.

The quantity of Australian exports is determined by

In Germany,expected future income increased during 2014.This increase led to

-The above table has data from the nation of Atlantica.Based on these data,when disposable income equals 8.0 there is

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The marginal propensity to consume in Syldavia is equal to

If aggregate planned expenditure equals GDP,then

-The table above gives data for the nation of Mosh.In Mosh,equilibrium expenditure equals

-The above table has data from the nation of Media.Based on these data,the marginal propensity to consume is

-The table above gives data for the nation of Mosh.If real GDP is $6 trillion,then

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance,saving and Investment

Money,the Price Level and Inflation

Aggregate Supply and Aggregate Demand

The Short-Run Policy Trade Off

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 12: Aggregate Expenditure Multiplier

The multiplier means that an increase in investment results in ________ aggregate expenditure that is ________ the increase in investment.

-The above table gives data for the nation of Mojo.At what level of real GDP is the unplanned inventory change equal to $1.75 trillion?

An increase in the price level shifts the AE curve

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The equilibrium expenditure is

Which of the following affects the magnitude of the multiplier? i.Marginal propensity to consume ii.Marginal propensity to invest iii.Marginal tax rate

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.Unplanned inventory changes equal $50 billion when real GDP equals

If the MPC is 0.6 and there are no imports or income taxes,the multiplier is

When the AE line lies above the 45° line,

If the price level increases,the AE curve shifts

Disposable income equals aggregate income

During 2015,a country reports aggregate planned expenditures of $5 trillion and an actual real GDP of $4 trillion.During 2015,

________ can trigger a recession.

The quantity of Australian exports is determined by

In Germany,expected future income increased during 2014.This increase led to

-The above table has data from the nation of Atlantica.Based on these data,when disposable income equals 8.0 there is

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The marginal propensity to consume in Syldavia is equal to

If aggregate planned expenditure equals GDP,then

-The table above gives data for the nation of Mosh.In Mosh,equilibrium expenditure equals

-The above table has data from the nation of Media.Based on these data,the marginal propensity to consume is

-The table above gives data for the nation of Mosh.If real GDP is $6 trillion,then

Getting Started

The Australian and Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance,saving and Investment

Money,the Price Level and Inflation

Aggregate Supply and Aggregate Demand

The Short-Run Policy Trade Off

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

The multiplier means that an increase in investment results in aggregate expenditure that is the increase in investment.