Data on after-tax income and consumption spending for the Adam Smith family are given below: $\begin{array}{|r|r|} \hline {\text { After-Tax Income }} & \text { Consumption Spending } \\ \hline \$ 9,000 & \$ 18,100 \\ \hline \$ 14,000 & \$ 22,600 \\ \hline \$ 19,000 & \$ 27,100 \\ \hline \$ 24,000 & \$ 31,600 \\ \hline \end{array}$ Based on these data, the Adam Smith family has a marginal propensity to consume equal to:

A) 0.9. B) 0.8. C) 0.75. D) 0.6. A) 0.9. B) 0.8. C) 0.75. D) 0.6.

Exam 25: Spending and Output in the Short Run

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In the short-run Keynesian model where the marginal propensity to consume is 0.75, to offset an expansionary gap resulting from a $1 billion increase in autonomous consumption, transfers must be:

(Multiple Choice)

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Question 21

Refer to the accompanying figure. Based on the figure, if the economy is in short-run equilibrium with output equal to 16,000, then there is , and could return the economy to potential output (Y*).

(Multiple Choice)

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Question 22

A fiscal policy action to close a recessionary gap is to:

(Multiple Choice)

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Question 23

Stabilization policies are government policies used to affect ________, with the objective of eliminating output gaps.

(Multiple Choice)

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Question 24

Provisions in the law that automatically increase government spending or decrease taxes when real output declines are called:

(Multiple Choice)

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Question 25

Planned investment may differ from actual investment because of:

(Multiple Choice)

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Question 26

A fiscal policy action to close an expansionary gap is to:

(Multiple Choice)

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Question 27

One drawback in using fiscal policy as a stabilization tool is that fiscal policy:

(Multiple Choice)

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Question 28

Data on after-tax income and consumption spending for the Adam Smith family are given below: After-Tax Income Consumption Spending \ 9,000 \ 18,100 \ 14,000 \ 22,600 \ 19,000 \ 27,100 \ 24,000 \ 31,600 Based on these data, the Adam Smith family has a marginal propensity to consume equal to:

(Multiple Choice)

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Question 29

Expansionary policies are government stabilization policies intended to increase:

(Multiple Choice)

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Question 30

The recession of 2007-2009 happened in part because, after the housing bubble burst in 2006, the ensuing financial crisis:

(Multiple Choice)

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Question 31

The income-expenditure multiplier arises because one person's additional spending becomes another person's additional income that will generate additional:

(Multiple Choice)

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Question 32

In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Autonomous expenditure equals:

(Multiple Choice)

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Question 33

The effect on short-run equilibrium output of a one-unit increase in autonomous expenditure is called:

(Multiple Choice)

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Question 34

C + I ᵖ + G + NX equals:

(Multiple Choice)

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Question 35

In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Planned aggregate expenditure equals:

(Multiple Choice)

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Question 36

If firms sell less than is expected, actual investment increases because ________, which is counted as investment.

(Multiple Choice)

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Question 37

If short-run equilibrium output equals 20,000 and potential output (Y*)equals 25,000, then this economy has a(n) gap that can be closed by .

(Multiple Choice)

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Question 38

The two parts of planned aggregate expenditure are expenditures and expenditures.

(Multiple Choice)

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Question 39

If planned aggregate expenditure (PAE )in an economy equals 2,000 + 0.8Y and potential output (Y*)equals 11,000, then this economy has:

(Multiple Choice)

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Question 40

Showing 21 - 40 of 146

Exam 25: Spending and Output in the Short Run

In the short-run Keynesian model where the marginal propensity to consume is 0.75, to offset an expansionary gap resulting from a $1 billion increase in autonomous consumption, transfers must be:

Refer to the accompanying figure. Based on the figure, if the economy is in short-run equilibrium with output equal to 16,000, then there is ________, and ________ could return the economy to potential output (Y*).

A fiscal policy action to close a recessionary gap is to:

Stabilization policies are government policies used to affect ________, with the objective of eliminating output gaps.

Provisions in the law that automatically increase government spending or decrease taxes when real output declines are called:

Planned investment may differ from actual investment because of:

A fiscal policy action to close an expansionary gap is to:

One drawback in using fiscal policy as a stabilization tool is that fiscal policy:

Data on after-tax income and consumption spending for the Adam Smith family are given below: After-Tax Income Consumption Spending \ 9,000 \ 18,100 \ 14,000 \ 22,600 \ 19,000 \ 27,100 \ 24,000 \ 31,600 Based on these data, the Adam Smith family has a marginal propensity to consume equal to:

Expansionary policies are government stabilization policies intended to increase:

The recession of 2007-2009 happened in part because, after the housing bubble burst in 2006, the ensuing financial crisis:

The income-expenditure multiplier arises because one person's additional spending becomes another person's additional income that will generate additional:

In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Autonomous expenditure equals:

The effect on short-run equilibrium output of a one-unit increase in autonomous expenditure is called:

C + I ᵖ + G + NX equals:

In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Planned aggregate expenditure equals:

If firms sell less than is expected, actual investment increases because ________, which is counted as investment.

If short-run equilibrium output equals 20,000 and potential output (Y*)equals 25,000, then this economy has a(n)________ gap that can be closed by ________.

The two parts of planned aggregate expenditure are ________ expenditures and ________ expenditures.

If planned aggregate expenditure (PAE )in an economy equals 2,000 + 0.8Y and potential output (Y*)equals 11,000, then this economy has:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

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Refer to the accompanying figure. Based on the figure, if the economy is in short-run equilibrium with output equal to 16,000, then there is , and could return the economy to potential output (Y*).

If short-run equilibrium output equals 20,000 and potential output (Y*)equals 25,000, then this economy has a(n) gap that can be closed by .

The two parts of planned aggregate expenditure are expenditures and expenditures.