Question 1

Given Table 23-3 below,fill in the values for saving. Assume there are no taxes.
Table 23-3

Accepted Answer

When taxes are zero,saving is

Question 2

Figure 23-4
  
-Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP₁ which is equal to $450 billion. If the MPC is 0.8,then how much must autonomous spending change for the economy to move to potential GDP?

Accepted Answer

A)  -$40 billion 
B)  -$10 billion 
C)  $10 billion 
D)  $40 billion 
A)  -$40 billion 
B)  -$10 billion 
C)  $10 billion 
D)  $40 billion

Question 3

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

Accepted Answer

A)  aggregate demand curve 
B)  savings line 
C)  45-degree line 
D)  consumption function 
A)  aggregate demand curve 
B)  savings line 
C)  45-degree line 
D)  consumption function

Question 4

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

Accepted Answer

A)  Price level increases raise real wealth, which causes consumption spending and aggregate expenditure to decline. 
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 expenditure. 
C)  Price level increases in the United States relative to other countries raise net exports, which lowers aggregate expenditure. 
D)  As the price level rises, government spending falls, which lowers aggregate expenditure. 
A)  Price level increases raise real wealth, which causes consumption spending and aggregate expenditure to decline. 
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 expenditure. 
C)  Price level increases in the United States relative to other countries raise net exports, which lowers aggregate expenditure. 
D)  As the price level rises, government spending falls, which lowers aggregate expenditure.

Question 5

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

Accepted Answer

A)  increase consumption by $9 million. 
B)  increase consumption by $1 million. 
C)  decrease consumption by $9 million. 
D)  decrease consumption by $1 million. 
A)  increase consumption by $9 million. 
B)  increase consumption by $1 million. 
C)  decrease consumption by $9 million. 
D)  decrease consumption by $1 million.

Question 6

Which of the following leads to a decrease real GDP?

Accepted Answer

A)  an increase in government spending 
B)  an increase in the inflation rate in other countries, relative to the inflation in the United States 
C)  an increase in interest rates 
D)  households have increasingly optimistic expectations about future income 
A)  an increase in government spending 
B)  an increase in the inflation rate in other countries, relative to the inflation in the United States 
C)  an increase in interest rates 
D)  households have increasingly optimistic expectations about future income

Question 7

________ is equal to consumption spending plus planned investment spending plus government purchases plus net exports.

Accepted Answer

A)  Full employment GDP 
B)  Short-run aggregate supply 
C)  Planned inventory investment 
D)  Planned aggregate expenditure 
A)  Full employment GDP 
B)  Short-run aggregate supply 
C)  Planned inventory investment 
D)  Planned aggregate expenditure

Question 8

Into which category of aggregate expenditure would each of the following transactions fall?
a.Sandra MacMillian purchases a new Ford Focus.
b.The city of Richardson buys 5 new garbage trucks..
c.Adrian Garcia buys a newly constructed townhome.
d.A consumer in Latvia orders an iPhone from Apple.
e.Ford Motor Company buys 300 new iPhones from Apple.

Accepted Answer

a.Consumption
b.Gove

Question 9

If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years,then

Accepted Answer

A)  investment spending will fall. 
B)  investment spending will rise. 
C)  investment spending will remain unaffected. 
D)  investment spending will rise and then fall. 
A)  investment spending will fall. 
B)  investment spending will rise. 
C)  investment spending will remain unaffected. 
D)  investment spending will rise and then fall.

Question 10

All of the following are true statements about the multiplier except

Accepted Answer

A)  the multiplier rises as the MPC rises. 
B)  the smaller the MPS, the larger the multiplier. 
C)  the multiplier is a value between zero and one. 
D)  the multiplier effect occurs when autonomous expenditure changes. 
A)  the multiplier rises as the MPC rises. 
B)  the smaller the MPS, the larger the multiplier. 
C)  the multiplier is a value between zero and one. 
D)  the multiplier effect occurs when autonomous expenditure changes.

Question 11

Consumption spending is $5 million,planned investment spending is $8 million,unplanned investment spending is $2 million,government purchases are $10 million,and net export spending is $2 million. What is aggregate expenditure?

Accepted Answer

A)  $15 million 
B)  $23 million 
C)  $25 million 
D)  $27 million 
A)  $15 million 
B)  $23 million 
C)  $25 million 
D)  $27 million

Question 12

A decrease in ________ can put your job at risk if aggregate expenditures fall.

Accepted Answer

A)  consumer confidence 
B)  the natural rate of unemployment 
C)  the inflation rate 
D)  the length of a business cycle 
A)  consumer confidence 
B)  the natural rate of unemployment 
C)  the inflation rate 
D)  the length of a business cycle

Question 13

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

Accepted Answer

A)  5. 
B)  0.75. 
C)  0.20. 
D)  0.15. 
A)  5. 
B)  0.75. 
C)  0.20. 
D)  0.15.

Question 14

Household wealth is defined as the value of a household's

Accepted Answer

A)  assets minus the value of its liabilities. 
B)  assets plus the value of its liabilities. 
C)  assets. 
D)  liabilities. 
A)  assets minus the value of its liabilities. 
B)  assets plus the value of its liabilities. 
C)  assets. 
D)  liabilities.

Question 15

When Javier's income increases by $5,000,he spends an additional $3,750 dollars. This implies that his marginal propensity to consume is 0.75.

Accepted Answer

A) True 
 B)False

Question 16

Goods that have been produced but not yet sold are referred to as

Accepted Answer

A)  understocks. 
B)  inventories. 
C)  pre-sold goods. 
D)  capital goods. 
A)  understocks. 
B)  inventories. 
C)  pre-sold goods. 
D)  capital goods.

Question 17

What impact does a higher price level have on interest rates,wealth,and investment spending?

Accepted Answer

A higher price level reduces t

Question 18

Which of the following is not a component of aggregate expenditure?

Accepted Answer

A)  consumption spending 
B)  planned investment spending 
C)  actual investment spending 
D)  government spending 
A)  consumption spending 
B)  planned investment spending 
C)  actual investment spending 
D)  government spending

Question 19

If the marginal propensity to save is 0.35,the multiplier is 2.86.

Accepted Answer

A) True 
 B)False

Question 20

The consumption function describes the relationship between

Accepted Answer

A)  consumption spending and national income. 
B)  consumption spending and aggregate income. 
C)  consumption spending and disposable income. 
D)  consumption spending and personal income. 
A)  consumption spending and national income. 
B)  consumption spending and aggregate income. 
C)  consumption spending and disposable income. 
D)  consumption spending and personal income.

Given Table 23-3 below,fill in the values for saving. Assume there are no taxes. Table 23-3

Figure 23-4 -Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP₁ which is equal to $450 billion. If the MPC is 0.8,then how much must autonomous spending change for the economy to move to potential GDP?

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

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

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

Which of the following leads to a decrease real GDP?

________ is equal to consumption spending plus planned investment spending plus government purchases plus net exports.

If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years,then

All of the following are true statements about the multiplier except

Consumption spending is $5 million,planned investment spending is $8 million,unplanned investment spending is $2 million,government purchases are $10 million,and net export spending is $2 million. What is aggregate expenditure?

A decrease in ________ can put your job at risk if aggregate expenditures fall.

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

Household wealth is defined as the value of a household's

When Javier's income increases by $5,000,he spends an additional $3,750 dollars. This implies that his marginal propensity to consume is 0.75.

Goods that have been produced but not yet sold are referred to as

What impact does a higher price level have on interest rates,wealth,and investment spending?

Which of the following is not a component of aggregate expenditure?

If the marginal propensity to save is 0.35,the multiplier is 2.86.

The consumption function describes the relationship between

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 12: Aggregate Expenditure and Output in the Short Run

Given Table 23-3 below,fill in the values for saving. Assume there are no taxes. Table 23-3

Figure 23-4 -Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP₁ which is equal to $450 billion. If the MPC is 0.8,then how much must autonomous spending change for the economy to move to potential GDP?

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

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

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

Which of the following leads to a decrease real GDP?

________ is equal to consumption spending plus planned investment spending plus government purchases plus net exports.

If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years,then

All of the following are true statements about the multiplier except

Consumption spending is $5 million,planned investment spending is $8 million,unplanned investment spending is $2 million,government purchases are $10 million,and net export spending is $2 million. What is aggregate expenditure?

A decrease in ________ can put your job at risk if aggregate expenditures fall.

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

Household wealth is defined as the value of a household's

When Javier's income increases by $5,000,he spends an additional $3,750 dollars. This implies that his marginal propensity to consume is 0.75.

Goods that have been produced but not yet sold are referred to as

What impact does a higher price level have on interest rates,wealth,and investment spending?

Which of the following is not a component of aggregate expenditure?

If the marginal propensity to save is 0.35,the multiplier is 2.86.

The consumption function describes the relationship between

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters