Question 1

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 2

If the multiplier is 5,the marginal propensity to consume must be 0.8.

Accepted Answer

A) True 
 B)False

Question 3

If planned aggregate expenditure is below potential GDP and planned aggregate expenditure equals GDP,then

Accepted Answer

A) actual inventory investment will be less than planned inventory investment. 
B) actual inventory investment will be greater than planned inventory investment. 
C) the economy is in a recession. 
D) the economy is at full employment. 
A) actual inventory investment will be less than planned inventory investment. 
B) actual inventory investment will be greater than planned inventory investment. 
C) the economy is in a recession. 
D) the economy is at full employment.

Question 4

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

Accepted Answer

A) 4. 
B) 0.75. 
C) 0.5. 
D) 0.25. 
A) 4. 
B) 0.75. 
C) 0.5. 
D) 0.25.

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

If the multiplier is 5,the marginal propensity to consume must be 0.8.

If planned aggregate expenditure is below potential GDP and planned aggregate expenditure equals GDP,then

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

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

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

If the multiplier is 5,the marginal propensity to consume must be 0.8.

If planned aggregate expenditure is below potential GDP and planned aggregate expenditure equals GDP,then

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

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