Question 1

Economists first began studying the relationship between changes in aggregate expenditures and changes in GDP

Accepted Answer

A) in the 1950s. 
B) during the Great Depression. 
C) at the end of the Civil War. 
D) during the Industrial Revolution. 
A) in the 1950s. 
B) during the Great Depression. 
C) at the end of the Civil War. 
D) during the Industrial Revolution.

Question 2

The passage of the Smoot-Hawley Tariff in 1930 sparked a trade war that caused net exports to ________ and real GDP to ________.

Accepted Answer

A) increase; increase 
B) decrease; increase 
C) increase; decrease 
D) decrease; decrease 
A) increase; increase 
B) decrease; increase 
C) increase; decrease 
D) decrease; decrease

Question 3

When Jack's income increases by $1,000,he spends an additional $850 dollars.This implies that his marginal propensity to consume is 0.85.

Accepted Answer

A) True 
 B)False

Question 4

If planned investment is equal to actual investment,then aggregate expenditure is equal to GDP.

Accepted Answer

A) True 
 B)False

Question 5

The sum of the marginal propensity to consume and the marginal propensity to save is always equal to

Accepted Answer

A) zero. 
B) 0.5. 
C) 1. 
D) 100. 
A) zero. 
B) 0.5. 
C) 1. 
D) 100.

Question 6

The ________ model focuses on the relationship between total spending and real GDP in the short run,assuming the price level is constant.

Accepted Answer

A) supply and demand 
B) national income 
C) aggregate expenditure 
D) business cycle 
A) supply and demand 
B) national income 
C) aggregate expenditure 
D) business cycle

Question 7

If the marginal propensity to consume is 0.6,the marginal propensity to save is

Accepted Answer

A) 0.4. 
B) 0.6. 
C) 1. 
D) 1.5. 
A) 0.4. 
B) 0.6. 
C) 1. 
D) 1.5.

Question 8

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China ________ U.S.firms is ________ the value of assembling the iPhones in Chinese factories.

Accepted Answer

A) exports to; equal to 
B) exports to; greater than 
C) imports from; less than 
D) imports from; greater than 
A) exports to; equal to 
B) exports to; greater than 
C) imports from; less than 
D) imports from; greater than

Question 9

If firms find that consumers are purchasing more than expected,which of the following would you expect?

Accepted Answer

A) Aggregate expenditure will likely be greater than GDP. 
B) Aggregate expenditure will likely be less than GDP. 
C) The economy will adjust to macroeconomic equilibrium as inventories rise,and production and employment fall. 
D) The economy will adjust to macroeconomic equilibrium as inventories fall,and production and employment fall. 
A) Aggregate expenditure will likely be greater than GDP. 
B) Aggregate expenditure will likely be less than GDP. 
C) The economy will adjust to macroeconomic equilibrium as inventories rise,and production and employment fall. 
D) The economy will adjust to macroeconomic equilibrium as inventories fall,and production and employment fall.

Question 10

From 1983-2017,net exports for the United States

Accepted Answer

A) grew and then declined. 
B) were negative. 
C) were positive. 
D) increased as exports rose above imports. 
A) grew and then declined. 
B) were negative. 
C) were positive. 
D) increased as exports rose above imports.

Question 11

An increase in the real interest rate will

Accepted Answer

A) cause consumers to spend more and save less. 
B) most likely lower consumers' purchases of durable goods. 
C) most likely lower the reward to savings. 
D) most likely lower the cost of borrowing. 
A) cause consumers to spend more and save less. 
B) most likely lower consumers' purchases of durable goods. 
C) most likely lower the reward to savings. 
D) most likely lower the cost of borrowing.

Question 12

Consumer spending ________ and investment spending ________.

Accepted Answer

A) is very volatile and subject to fluctuations; follows a smooth trend 
B) follows a smooth trend; is more volatile and subject to fluctuations 
C) follows a smooth trend; is the most stable component of aggregate expenditure 
D) is very erratic; is also erratic,but less erratic than consumer spending 
A) is very volatile and subject to fluctuations; follows a smooth trend 
B) follows a smooth trend; is more volatile and subject to fluctuations 
C) follows a smooth trend; is the most stable component of aggregate expenditure 
D) is very erratic; is also erratic,but less erratic than consumer spending

Question 13

If the consumption function is defined as C = 5,500 + 0.9Y,what is the value of the multiplier?

Accepted Answer

A) 0.1 
B) 0.9 
C) 9 
D) 10 
A) 0.1 
B) 0.9 
C) 9 
D) 10

Question 14

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 GDP?

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 15

Planned aggregate expenditure is equal to

Accepted Answer

A) consumption spending only. 
B) consumption spending plus planned investment spending. 
C) planned investment spending only. 
D) consumption spending plus planned investment spending plus government purchases plus net exports. 
A) consumption spending only. 
B) consumption spending plus planned investment spending. 
C) planned investment spending only. 
D) consumption spending plus planned investment spending plus government purchases plus net exports.

Question 16

The recession of 2007-2009 resulted in falling revenues and large layoffs for a vast number of companies.By 2017,unemployment ________ and spending ________ in the economy.

Accepted Answer

A) fell; decreased 
B) rose; increased 
C) fell; increased 
D) rose; decreased 
A) fell; decreased 
B) rose; increased 
C) fell; increased 
D) rose; decreased

Question 17

Actual investment spending includes spending by consumers on

Accepted Answer

A) durable goods. 
B) nondurable goods. 
C) new houses. 
D) services. 
A) durable goods. 
B) nondurable goods. 
C) new houses. 
D) services.

Question 18

If economists forecast an increase in aggregate expenditure,which of the following is likely to occur?

Accepted Answer

A) GDP will rise. 
B) GDP will fall. 
C) Wages will fall. 
D) Inventories will rise. 
A) GDP will rise. 
B) GDP will fall. 
C) Wages will fall. 
D) Inventories will rise.

Question 19

Figure 12-2  
-Refer to Figure 12-2.If the U.S.economy is currently at point K,which of the following could cause it to move to point N?

Accepted Answer

A) The price level in the United States rises relative to the price level in other countries. 
B) Congress passes investment tax incentives. 
C) The interest rate rises. 
D) Household wealth declines. 
A) The price level in the United States rises relative to the price level in other countries. 
B) Congress passes investment tax incentives. 
C) The interest rate rises. 
D) Household wealth declines.

Question 20

________ describes the relationship between consumption spending and disposable income.

Accepted Answer

A) Household wealth 
B) The liquidity trap 
C) The consumption function 
D) The paradox of thrift 
A) Household wealth 
B) The liquidity trap 
C) The consumption function 
D) The paradox of thrift

Economists first began studying the relationship between changes in aggregate expenditures and changes in GDP

The passage of the Smoot-Hawley Tariff in 1930 sparked a trade war that caused net exports to and real GDP to .

When Jack's income increases by $1,000,he spends an additional $850 dollars.This implies that his marginal propensity to consume is 0.85.

If planned investment is equal to actual investment,then aggregate expenditure is equal to GDP.

The sum of the marginal propensity to consume and the marginal propensity to save is always equal to

The ________ model focuses on the relationship between total spending and real GDP in the short run,assuming the price level is constant.

If the marginal propensity to consume is 0.6,the marginal propensity to save is

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China U.S.firms is the value of assembling the iPhones in Chinese factories.

If firms find that consumers are purchasing more than expected,which of the following would you expect?

From 1983-2017,net exports for the United States

An increase in the real interest rate will

Consumer spending and investment spending .

If the consumption function is defined as C = 5,500 + 0.9Y,what is the value of the multiplier?

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 GDP?

Planned aggregate expenditure is equal to

The recession of 2007-2009 resulted in falling revenues and large layoffs for a vast number of companies.By 2017,unemployment and spending in the economy.

Actual investment spending includes spending by consumers on

If economists forecast an increase in aggregate expenditure,which of the following is likely to occur?

Figure 12-2 -Refer to Figure 12-2.If the U.S.economy is currently at point K,which of the following could cause it to move to point N?

________ describes the relationship between consumption spending and disposable income.

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

Exam 12: Aggregate Expenditure and Output in the Short Run

Economists first began studying the relationship between changes in aggregate expenditures and changes in GDP

The passage of the Smoot-Hawley Tariff in 1930 sparked a trade war that caused net exports to ________ and real GDP to ________.

When Jack's income increases by $1,000,he spends an additional $850 dollars.This implies that his marginal propensity to consume is 0.85.

If planned investment is equal to actual investment,then aggregate expenditure is equal to GDP.

The sum of the marginal propensity to consume and the marginal propensity to save is always equal to

The ________ model focuses on the relationship between total spending and real GDP in the short run,assuming the price level is constant.

If the marginal propensity to consume is 0.6,the marginal propensity to save is

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China ________ U.S.firms is ________ the value of assembling the iPhones in Chinese factories.

If firms find that consumers are purchasing more than expected,which of the following would you expect?

From 1983-2017,net exports for the United States

An increase in the real interest rate will

Consumer spending ________ and investment spending ________.

If the consumption function is defined as C = 5,500 + 0.9Y,what is the value of the multiplier?

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 GDP?

Planned aggregate expenditure is equal to

The recession of 2007-2009 resulted in falling revenues and large layoffs for a vast number of companies.By 2017,unemployment ________ and spending ________ in the economy.

Actual investment spending includes spending by consumers on

If economists forecast an increase in aggregate expenditure,which of the following is likely to occur?

Figure 12-2 -Refer to Figure 12-2.If the U.S.economy is currently at point K,which of the following could cause it to move to point N?

________ describes the relationship between consumption spending and disposable income.

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

The passage of the Smoot-Hawley Tariff in 1930 sparked a trade war that caused net exports to and real GDP to .

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China U.S.firms is the value of assembling the iPhones in Chinese factories.

Consumer spending and investment spending .

The recession of 2007-2009 resulted in falling revenues and large layoffs for a vast number of companies.By 2017,unemployment and spending in the economy.