Question 1

If disposable income increases from $5 trillion to $6 trillion and,as a result,consumption expenditure increases from $7 trillion to $7.8 trillion,the MPC is

Accepted Answer

A) 1.0. 
B) 6 ÷ 7.8 = 0.77. 
C) 6 ÷ 7 = 0.86. 
D) 5 ÷ 7 = 0.71. 
E) 0.8. 
A) 1.0. 
B) 6 ÷ 7.8 = 0.77. 
C) 6 ÷ 7 = 0.86. 
D) 5 ÷ 7 = 0.71. 
E) 0.8.

Question 2

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

Accepted Answer

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

Question 3

During 2015,a country has consumption expenditures of $3.0 trillion,investment expenditures of $1.5 trillion,government expenditure of $1.5 trillion,exports of $1.0 trillion,and imports of $1.5 trillion.Aggregate expenditure for the country is

Accepted Answer

A) $7.0 trillion. 
B) $5.5 trillion. 
C) $8.5 trillion. 
D) $6.0 trillion. 
E) $6.5 trillion. 
A) $7.0 trillion. 
B) $5.5 trillion. 
C) $8.5 trillion. 
D) $6.0 trillion. 
E) $6.5 trillion.

Question 4

Induced expenditure is any expenditure that

Accepted Answer

A) changes when real GDP changes. 
B) is fixed for all levels of real GDP. 
C) is fixed for all price levels. 
D) is fixed for all levels of the interest rate. 
E) changes when the interest rate changes. 
A) changes when real GDP changes. 
B) is fixed for all levels of real GDP. 
C) is fixed for all price levels. 
D) is fixed for all levels of the interest rate. 
E) changes when the interest rate changes.

Question 5

When disposable income increases from $400 billion to $500 billion,consumption expenditure increases from $320 billion to $400 trillion.The MPC is

Accepted Answer

A) $6.8 trillion. 
B) 0.60. 
C) 1.00. 
D) 0.68. 
E) 0.80. 
A) $6.8 trillion. 
B) 0.60. 
C) 1.00. 
D) 0.68. 
E) 0.80.

Question 6

-The table above gives data for the nation of Mosh.If we graphed these data,we would see that when GDP equals

Accepted Answer

A) $4 trillion,the AE curve intersects the 45° line. 
B) $6 trillion,the AE curve is below the 45° line. 
C) $9 trillion,the AE curve intersects the 45° line. 
D) $10 trillion,the 45° line is above the AE curve. 
E) $10 trillion,the AE curve intersects the 45° line. 
A) $4 trillion,the AE curve intersects the 45° line. 
B) $6 trillion,the AE curve is below the 45° line. 
C) $9 trillion,the AE curve intersects the 45° line. 
D) $10 trillion,the 45° line is above the AE curve. 
E) $10 trillion,the AE curve intersects the 45° line.

Question 7

The AD curve is the relationship between

Accepted Answer

A) aggregate planned expenditure and real GDP when the price level is fixed. 
B) aggregate planned expenditure and the quantity of real GDP demanded. 
C) the quantity of real GDP demanded and the unemployment rate. 
D) aggregate planned expenditure and the price level. 
E) the quantity of real GDP demanded and the quantity of real GDP supplied. 
A) aggregate planned expenditure and real GDP when the price level is fixed. 
B) aggregate planned expenditure and the quantity of real GDP demanded. 
C) the quantity of real GDP demanded and the unemployment rate. 
D) aggregate planned expenditure and the price level. 
E) the quantity of real GDP demanded and the quantity of real GDP supplied.

Question 8

The smaller the amount saved out of a change in disposable income,the

Accepted Answer

A) more horizontal the consumption function. 
B) more net taxes affect consumption. 
C) larger the MPC. 
D) smaller the MPC. 
E) smaller is autonomous consumption. 
A) more horizontal the consumption function. 
B) more net taxes affect consumption. 
C) larger the MPC. 
D) smaller the MPC. 
E) smaller is autonomous consumption.

Question 9

An increase in expected future disposable income ________ consumption expenditure and ________.

Accepted Answer

A) increases;results in a movement upward along the consumption function 
B) decreases;shifts the consumption function upward 
C) decreases;shifts the consumption function downward 
D) increases;shifts the consumption function upward 
E) increases;shifts the consumption function downward 
A) increases;results in a movement upward along the consumption function 
B) decreases;shifts the consumption function upward 
C) decreases;shifts the consumption function downward 
D) increases;shifts the consumption function upward 
E) increases;shifts the consumption function downward

Question 10

To find aggregate planned expenditures,which of the following must be added to consumption expenditure?
i.Net exports
ii.Investment
iii.Government expenditure on goods and services

Accepted Answer

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

Question 11

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.If real GDP is equal to $400 billion then,

Accepted Answer

A) aggregate expenditure is $450 billion. 
B) unplanned inventory is -$200 billion. 
C) aggregate expenditure is equal to consumption expenditure. 
D) unplanned inventory is $200 billion. 
E) unplanned inventory is -$300 billion. 
A) aggregate expenditure is $450 billion. 
B) unplanned inventory is -$200 billion. 
C) aggregate expenditure is equal to consumption expenditure. 
D) unplanned inventory is $200 billion. 
E) unplanned inventory is -$300 billion.

Question 12

An economy has no imports or income taxes.The MPC is 0.75 and real GDP is $120 billion.Businesses increase investment by $4 billion.The new level of real GDP is

Accepted Answer

A) $140 billion. 
B) $132 billion. 
C) $136 billion. 
D) $124 billion. 
E) $128 billion. 
A) $140 billion. 
B) $132 billion. 
C) $136 billion. 
D) $124 billion. 
E) $128 billion.

Question 13

If the marginal propensity to consume is very close to zero,then the multiplier

Accepted Answer

A) is very close to zero. 
B) is very close to one. 
C) is very large. 
D) might be negative if the marginal tax rate is large enough. 
E) cannot be calculated. 
A) is very close to zero. 
B) is very close to one. 
C) is very large. 
D) might be negative if the marginal tax rate is large enough. 
E) cannot be calculated.

Question 14

When the price level falls,the aggregate planned expenditure curve shifts ________,equilibrium expenditure ________ and there is a movement ________ along the aggregate demand curve.

Accepted Answer

A) upward;increases;upward 
B) upward;increases;downward 
C) downward;decreases;downward 
D) upward;decreases;downward 
E) downward;increases;upward 
A) upward;increases;upward 
B) upward;increases;downward 
C) downward;decreases;downward 
D) upward;decreases;downward 
E) downward;increases;upward

Question 15

If disposable income decreases during a recession,there is

Accepted Answer

A) an upward shift in the consumption function. 
B) a downward shift in the consumption function. 
C) no change in consumption expenditures. 
D) movement upward along the consumption function. 
E) movement downward along the consumption function. 
A) an upward shift in the consumption function. 
B) a downward shift in the consumption function. 
C) no change in consumption expenditures. 
D) movement upward along the consumption function. 
E) movement downward along the consumption function.

Question 16

-In the figure above,if real GDP is $20 trillion,aggregate planned expenditure is ________ $20 trillion and unplanned inventory changes are ________.

Accepted Answer

A) less than;positive 
B) less than;negative 
C) equal to;negative 
D) equal to;positive 
E) equal to;equals to zero 
A) less than;positive 
B) less than;negative 
C) equal to;negative 
D) equal to;positive 
E) equal to;equals to zero

Question 17

What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?

Accepted Answer

A) 0.34 
B) $166 
C) $34 
D) 0.66 
E) More information is needed to determine the MPC. 
A) 0.34 
B) $166 
C) $34 
D) 0.66 
E) More information is needed to determine the MPC.

Question 18

-The above table gives data for the nation of South Hampton.There are no imports into or exports from South Hampton.The equilibrium level of real GDP is

Accepted Answer

A) $700 billion. 
B) $600 billion. 
C) $400 billion. 
D) $800 billion. 
E) $500 billion. 
A) $700 billion. 
B) $600 billion. 
C) $400 billion. 
D) $800 billion. 
E) $500 billion.

Question 19

-The table above gives data for the nation of Mosh.If real GDP is $9 trillion,then unplanned inventory change equals

Accepted Answer

A) $5.5 trillion. 
B) 0. 
C) $5 trillion. 
D) $9 trillion. 
E) $1.25 trillion. 
A) $5.5 trillion. 
B) 0. 
C) $5 trillion. 
D) $9 trillion. 
E) $1.25 trillion.

Question 20

-In the figure above,when disposable income equals $10 trillion,

Accepted Answer

A) consumption expenditure is less than disposable income,so consumers are saving. 
B) consumption expenditure is greater than disposable income,so consumers are dissaving. 
C) consumption expenditure is greater than disposable income but it is not possible to determine if consumers are saving or dissaving. 
D) consumption expenditure is greater than disposable income,so consumers are saving. 
E) consumption expenditure is less than disposable income,so consumers are dissaving. 
A) consumption expenditure is less than disposable income,so consumers are saving. 
B) consumption expenditure is greater than disposable income,so consumers are dissaving. 
C) consumption expenditure is greater than disposable income but it is not possible to determine if consumers are saving or dissaving. 
D) consumption expenditure is greater than disposable income,so consumers are saving. 
E) consumption expenditure is less than disposable income,so consumers are dissaving.

If disposable income increases from $5 trillion to $6 trillion and,as a result,consumption expenditure increases from $7 trillion to $7.8 trillion,the MPC is

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

During 2015,a country has consumption expenditures of $3.0 trillion,investment expenditures of $1.5 trillion,government expenditure of $1.5 trillion,exports of $1.0 trillion,and imports of $1.5 trillion.Aggregate expenditure for the country is

Induced expenditure is any expenditure that

When disposable income increases from $400 billion to $500 billion,consumption expenditure increases from $320 billion to $400 trillion.The MPC is

-The table above gives data for the nation of Mosh.If we graphed these data,we would see that when GDP equals

The AD curve is the relationship between

The smaller the amount saved out of a change in disposable income,the

An increase in expected future disposable income consumption expenditure and .

To find aggregate planned expenditures,which of the following must be added to consumption expenditure? i.Net exports ii.Investment iii.Government expenditure on goods and services

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.If real GDP is equal to $400 billion then,

An economy has no imports or income taxes.The MPC is 0.75 and real GDP is $120 billion.Businesses increase investment by $4 billion.The new level of real GDP is

If the marginal propensity to consume is very close to zero,then the multiplier

When the price level falls,the aggregate planned expenditure curve shifts ,equilibrium expenditure and there is a movement along the aggregate demand curve.

If disposable income decreases during a recession,there is

-In the figure above,if real GDP is $20 trillion,aggregate planned expenditure is $20 trillion and unplanned inventory changes are .

What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?

-The above table gives data for the nation of South Hampton.There are no imports into or exports from South Hampton.The equilibrium level of real GDP is

-The table above gives data for the nation of Mosh.If real GDP is $9 trillion,then unplanned inventory change equals

-In the figure above,when disposable income equals $10 trillion,

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

If disposable income increases from $5 trillion to $6 trillion and,as a result,consumption expenditure increases from $7 trillion to $7.8 trillion,the MPC is

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

During 2015,a country has consumption expenditures of $3.0 trillion,investment expenditures of $1.5 trillion,government expenditure of $1.5 trillion,exports of $1.0 trillion,and imports of $1.5 trillion.Aggregate expenditure for the country is

Induced expenditure is any expenditure that

When disposable income increases from $400 billion to $500 billion,consumption expenditure increases from $320 billion to $400 trillion.The MPC is

-The table above gives data for the nation of Mosh.If we graphed these data,we would see that when GDP equals

The AD curve is the relationship between

The smaller the amount saved out of a change in disposable income,the

An increase in expected future disposable income ________ consumption expenditure and ________.

To find aggregate planned expenditures,which of the following must be added to consumption expenditure? i.Net exports ii.Investment iii.Government expenditure on goods and services

-The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.If real GDP is equal to $400 billion then,

An economy has no imports or income taxes.The MPC is 0.75 and real GDP is $120 billion.Businesses increase investment by $4 billion.The new level of real GDP is

If the marginal propensity to consume is very close to zero,then the multiplier

When the price level falls,the aggregate planned expenditure curve shifts ________,equilibrium expenditure ________ and there is a movement ________ along the aggregate demand curve.

If disposable income decreases during a recession,there is

-In the figure above,if real GDP is $20 trillion,aggregate planned expenditure is ________ $20 trillion and unplanned inventory changes are ________.

What is the value of the MPC if $66 out of every $100 increase in disposable income is consumed?

-The above table gives data for the nation of South Hampton.There are no imports into or exports from South Hampton.The equilibrium level of real GDP is

-The table above gives data for the nation of Mosh.If real GDP is $9 trillion,then unplanned inventory change equals

-In the figure above,when disposable income equals $10 trillion,

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

An increase in expected future disposable income consumption expenditure and .

When the price level falls,the aggregate planned expenditure curve shifts ,equilibrium expenditure and there is a movement along the aggregate demand curve.

-In the figure above,if real GDP is $20 trillion,aggregate planned expenditure is $20 trillion and unplanned inventory changes are .