Question 1

-The table above gives data for the nation of Mosh.The MPC of the economy is

Accepted Answer

A) 0.80. 
B) 1. 
C) 0.75. 
D) 0.90. 
E) unable to be determined with the information provided. 
A) 0.80. 
B) 1. 
C) 0.75. 
D) 0.90. 
E) unable to be determined with the information provided.

Question 2

What is the key difference between the aggregate expenditure model and the aggregate demand/aggregate supply model?

Accepted Answer

A) The aggregate demand/aggregate supply model assumes that the price level is fixed. 
B) The aggregate expenditure model assumes that real GDP is fixed. 
C) The aggregate expenditure model examines monetary policy,whereas the aggregate demand/aggregate supply model does not. 
D) The aggregate expenditure model assumes that the price level is fixed. 
E) Monetary and real factors interact in the aggregate demand/aggregate supply model. 
A) The aggregate demand/aggregate supply model assumes that the price level is fixed. 
B) The aggregate expenditure model assumes that real GDP is fixed. 
C) The aggregate expenditure model examines monetary policy,whereas the aggregate demand/aggregate supply model does not. 
D) The aggregate expenditure model assumes that the price level is fixed. 
E) Monetary and real factors interact in the aggregate demand/aggregate supply model.

Question 3

The ________ the marginal tax rate,the ________ the effect on aggregate expenditure from a change in investment.

Accepted Answer

A) larger;larger 
B) larger;smaller 
C) smaller;smaller 
D) smaller;larger 
E) More information about the effect on GDP is needed to answer the question. 
A) larger;larger 
B) larger;smaller 
C) smaller;smaller 
D) smaller;larger 
E) More information about the effect on GDP is needed to answer the question.

Question 4

When Joe's disposable income is $50,000,his consumption expenditure is $45,000,and when his disposable income is $60,000,his consumption expenditure is $53,000.Joe's marginal propensity to consume is

Accepted Answer

A) $8,000. 
B) 1.25 
C) 80. 
D) 100. 
E) 0.80. 
A) $8,000. 
B) 1.25 
C) 80. 
D) 100. 
E) 0.80.

Question 5

As a result of an initial increase in investment of $200 billion,real GDP increased by $800 billion.Given this information,the expenditure multiplier equals

Accepted Answer

A) 2. 
B) 6. 
C) 4. 
D) 1/4. 
E) $800 billion. 
A) 2. 
B) 6. 
C) 4. 
D) 1/4. 
E) $800 billion.

Question 6

The expenditure multiplier measures the change in

Accepted Answer

A) autonomous spending that results from a change in equilibrium expenditure. 
B) equilibrium expenditure that results from a change in autonomous expenditure. 
C) the price level that results from a change in real GDP. 
D) consumption expenditure for a given change in disposable income. 
E) equilibrium expenditure from a change in induced consumption. 
A) autonomous spending that results from a change in equilibrium expenditure. 
B) equilibrium expenditure that results from a change in autonomous expenditure. 
C) the price level that results from a change in real GDP. 
D) consumption expenditure for a given change in disposable income. 
E) equilibrium expenditure from a change in induced consumption.

Question 7

The aggregate expenditure (AE)curve

Accepted Answer

A) includes expenditures by domestic residents only. 
B) includes expenditures on foreign as well as domestic goods. 
C) includes all expenditures on domestic goods. 
D) adds expenditures on imports because they are consumed in the nation and subtracts expenditures on exports because they are consumed abroad. 
E) does not include expenditures on either imports or exports. 
A) includes expenditures by domestic residents only. 
B) includes expenditures on foreign as well as domestic goods. 
C) includes all expenditures on domestic goods. 
D) adds expenditures on imports because they are consumed in the nation and subtracts expenditures on exports because they are consumed abroad. 
E) does not include expenditures on either imports or exports.

Question 8

The level of equilibrium expenditure at each price level determines

Accepted Answer

A) the points on the AD curve. 
B) the price level. 
C) the points on the AE curve. 
D) aggregate planned production. 
E) full employment. 
A) the points on the AD curve. 
B) the price level. 
C) the points on the AE curve. 
D) aggregate planned production. 
E) full employment.

Question 9

When Australian real GDP increases,Australian imports

Accepted Answer

A) increase by more than the change in real GDP. 
B) increase by the same amount. 
C) decrease by the same amount. 
D) increase by less than the change in real GDP. 
E) decrease by less than the change in real GDP. 
A) increase by more than the change in real GDP. 
B) increase by the same amount. 
C) decrease by the same amount. 
D) increase by less than the change in real GDP. 
E) decrease by less than the change in real GDP.

Question 10

Moving along the aggregate expenditure (AE)curve,when real GDP increases,aggregate planned expenditures increase

Accepted Answer

A) by the same percentage as real GDP. 
B) by more than real GDP. 
C) by less than real GDP. 
D) proportionately with real GDP. 
E) by the same amount as real GDP. 
A) by the same percentage as real GDP. 
B) by more than real GDP. 
C) by less than real GDP. 
D) proportionately with real GDP. 
E) by the same amount as real GDP.

Question 11

For each one dollar increase in real GDP,aggregate planned expenditure

Accepted Answer

A) increases by more than a dollar. 
B) increases by less than a dollar. 
C) is unaffected. 
D) increases only if autonomous expenditure increases. 
E) increases by one dollar. 
A) increases by more than a dollar. 
B) increases by less than a dollar. 
C) is unaffected. 
D) increases only if autonomous expenditure increases. 
E) increases by one dollar.

Question 12

Which of the following variables is fixed in the aggregate expenditure model?

Accepted Answer

A) Real GDP 
B) Price level 
C) Investment 
D) Consumption 
E) Output 
A) Real GDP 
B) Price level 
C) Investment 
D) Consumption 
E) Output

Question 13

Aggregate planned expenditure decreases if

Accepted Answer

A) real GDP decreases. 
B) government expenditure on goods and services increases. 
C) autonomous consumption increases. 
D) exports increase. 
E) investment increases. 
A) real GDP decreases. 
B) government expenditure on goods and services increases. 
C) autonomous consumption increases. 
D) exports increase. 
E) investment increases.

Question 14

Unplanned inventories increase when

Accepted Answer

A) actual aggregate expenditure is less than GDP. 
B) actual aggregate expenditure is greater than aggregate planned expenditure. 
C) actual aggregate expenditure is equal to GDP. 
D) aggregate planned expenditure is less than GDP. 
E) real GDP is less than aggregate planned expenditure. 
A) actual aggregate expenditure is less than GDP. 
B) actual aggregate expenditure is greater than aggregate planned expenditure. 
C) actual aggregate expenditure is equal to GDP. 
D) aggregate planned expenditure is less than GDP. 
E) real GDP is less than aggregate planned expenditure.

Question 15

-The above table has data from the nation of Atlantica.Based on these data,autonomous consumption is

Accepted Answer

A) $5.8 trillion. 
B) $1.8 trillion. 
C) $2.6 trillion. 
D) $4.0 trillion. 
E) $3.2 trillion. 
A) $5.8 trillion. 
B) $1.8 trillion. 
C) $2.6 trillion. 
D) $4.0 trillion. 
E) $3.2 trillion.

Question 16

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.Aggregate planned expenditure is less than actual expenditure if real GDP is

Accepted Answer

A) less than $800 billion. 
B) more than $800 billion. 
C) less than $700 billion. 
D) $800 billion. 
E) more than $700 billion. 
A) less than $800 billion. 
B) more than $800 billion. 
C) less than $700 billion. 
D) $800 billion. 
E) more than $700 billion.

Question 17

The idea of the multiplier is that a change in ________ expenditure changes real GDP,which then changes ________ expenditure.The change in total expenditure will be larger than the initial change in ________ expenditure.

Accepted Answer

A) autonomous;induced;autonomous 
B) induced;induced;autonomous 
C) induced;autonomous;autonomous 
D) induced;autonomous;induced 
E) autonomous;induced;induced 
A) autonomous;induced;autonomous 
B) induced;induced;autonomous 
C) induced;autonomous;autonomous 
D) induced;autonomous;induced 
E) autonomous;induced;induced

Question 18

-The figure above shows a nation's consumption function.If disposable income is $2 trillion,then the MPC is ________ and saving is ________.

Accepted Answer

A) positive;zero 
B) positive;positive 
C) positive;negative 
D) negative;positive 
E) negative;negative 
A) positive;zero 
B) positive;positive 
C) positive;negative 
D) negative;positive 
E) negative;negative

Question 19

Aggregate expenditure is equal to

Accepted Answer

A) C + I + G - NX. 
B) C - I - G - NX. 
C) C + I + G. 
D) Y + C + I + G + NX. 
E) C + I + G + NX. 
A) C + I + G - NX. 
B) C - I - G - NX. 
C) C + I + G. 
D) Y + C + I + G + NX. 
E) C + I + G + NX.

Question 20

Equilibrium expenditure occurs when

Accepted Answer

A) disposable income equals consumption expenditures plus imports. 
B) aggregate planned expenditure equals real GDP. 
C) real GDP plus net taxes equals disposable income. 
D) disposable income equals real GDP. 
E) real GDP minus net taxes equals disposable income. 
A) disposable income equals consumption expenditures plus imports. 
B) aggregate planned expenditure equals real GDP. 
C) real GDP plus net taxes equals disposable income. 
D) disposable income equals real GDP. 
E) real GDP minus net taxes equals disposable income.

-The table above gives data for the nation of Mosh.The MPC of the economy is

What is the key difference between the aggregate expenditure model and the aggregate demand/aggregate supply model?

The the marginal tax rate,the the effect on aggregate expenditure from a change in investment.

When Joe's disposable income is $50,000,his consumption expenditure is $45,000,and when his disposable income is $60,000,his consumption expenditure is $53,000.Joe's marginal propensity to consume is

As a result of an initial increase in investment of $200 billion,real GDP increased by $800 billion.Given this information,the expenditure multiplier equals

The expenditure multiplier measures the change in

The aggregate expenditure (AE)curve

The level of equilibrium expenditure at each price level determines

When Australian real GDP increases,Australian imports

Moving along the aggregate expenditure (AE)curve,when real GDP increases,aggregate planned expenditures increase

For each one dollar increase in real GDP,aggregate planned expenditure

Which of the following variables is fixed in the aggregate expenditure model?

Aggregate planned expenditure decreases if

Unplanned inventories increase when

-The above table has data from the nation of Atlantica.Based on these data,autonomous consumption is

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.Aggregate planned expenditure is less than actual expenditure if real GDP is

The idea of the multiplier is that a change in expenditure changes real GDP,which then changes expenditure.The change in total expenditure will be larger than the initial change in expenditure.

-The figure above shows a nation's consumption function.If disposable income is $2 trillion,then the MPC is and saving is .

Aggregate expenditure is equal to

Equilibrium expenditure occurs when

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 table above gives data for the nation of Mosh.The MPC of the economy is

What is the key difference between the aggregate expenditure model and the aggregate demand/aggregate supply model?

The ________ the marginal tax rate,the ________ the effect on aggregate expenditure from a change in investment.

When Joe's disposable income is $50,000,his consumption expenditure is $45,000,and when his disposable income is $60,000,his consumption expenditure is $53,000.Joe's marginal propensity to consume is

As a result of an initial increase in investment of $200 billion,real GDP increased by $800 billion.Given this information,the expenditure multiplier equals

The expenditure multiplier measures the change in

The aggregate expenditure (AE)curve

The level of equilibrium expenditure at each price level determines

When Australian real GDP increases,Australian imports

Moving along the aggregate expenditure (AE)curve,when real GDP increases,aggregate planned expenditures increase

For each one dollar increase in real GDP,aggregate planned expenditure

Which of the following variables is fixed in the aggregate expenditure model?

Aggregate planned expenditure decreases if

Unplanned inventories increase when

-The above table has data from the nation of Atlantica.Based on these data,autonomous consumption is

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.Aggregate planned expenditure is less than actual expenditure if real GDP is

The idea of the multiplier is that a change in ________ expenditure changes real GDP,which then changes ________ expenditure.The change in total expenditure will be larger than the initial change in ________ expenditure.

-The figure above shows a nation's consumption function.If disposable income is $2 trillion,then the MPC is ________ and saving is ________.

Aggregate expenditure is equal to

Equilibrium expenditure occurs when

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 the marginal tax rate,the the effect on aggregate expenditure from a change in investment.

The idea of the multiplier is that a change in expenditure changes real GDP,which then changes expenditure.The change in total expenditure will be larger than the initial change in expenditure.

-The figure above shows a nation's consumption function.If disposable income is $2 trillion,then the MPC is and saving is .