Question 1

A decrease in the price level will

Accepted Answer

A)  shift the aggregate expenditure line upward 
B)  shift the aggregate expenditure line downward 
C)  cause a movement up along the aggregate expenditure line 
D)  cause a movement down along the aggregate expenditure line 
E)  have no effect on the aggregate expenditure or the equilibrium level of real GDP 
A)  shift the aggregate expenditure line upward 
B)  shift the aggregate expenditure line downward 
C)  cause a movement up along the aggregate expenditure line 
D)  cause a movement down along the aggregate expenditure line 
E)  have no effect on the aggregate expenditure or the equilibrium level of real GDP

Question 2

The economy will expand if

Accepted Answer

A)  leakages exceed injections 
B)  injections exceed leakages 
C)  leakages equal injections 
D)  expenditures are less than output 
E)  saving exceeds investment 
A)  leakages exceed injections 
B)  injections exceed leakages 
C)  leakages equal injections 
D)  expenditures are less than output 
E)  saving exceeds investment

Question 3

On the aggregate expenditure graph,if autonomous saving increases by $15 billion,

Accepted Answer

A)  the aggregate expenditure line shifts upward by $15 billion 
B)  planned investment increases by $15 billion 
C)  the aggregate expenditure line shifts downward by $15 billion 
D)  planned investment decreases by $15 billion 
E)  the equilibrium level of real GDP demanded decreases by $15 billion 
A)  the aggregate expenditure line shifts upward by $15 billion 
B)  planned investment increases by $15 billion 
C)  the aggregate expenditure line shifts downward by $15 billion 
D)  planned investment decreases by $15 billion 
E)  the equilibrium level of real GDP demanded decreases by $15 billion

Question 4

Which of the following is true about the relationship between the aggregate demand curve and the aggregate expenditure line?

Accepted Answer

A)  If the aggregate expenditure line shifts while prices are constant,the resulting change in equilibrium output demanded can be depicted as a movement along the aggregate demand curve. 
B)  If the aggregate expenditure line shifts while prices are constant,the resulting change in equilibrium output demanded can be depicted as a shift of the aggregate demand curve. 
C)  Any time the aggregate expenditure line shifts,the aggregate demand curve shifts as well. 
D)  Any time there is a movement along the aggregate expenditure curve,there is movement along the aggregate demand curve as well. 
E)  Any time the price level changes,the aggregate demand curve shifts. 
A)  If the aggregate expenditure line shifts while prices are constant,the resulting change in equilibrium output demanded can be depicted as a movement along the aggregate demand curve. 
B)  If the aggregate expenditure line shifts while prices are constant,the resulting change in equilibrium output demanded can be depicted as a shift of the aggregate demand curve. 
C)  Any time the aggregate expenditure line shifts,the aggregate demand curve shifts as well. 
D)  Any time there is a movement along the aggregate expenditure curve,there is movement along the aggregate demand curve as well. 
E)  Any time the price level changes,the aggregate demand curve shifts.

Question 5

The aggregate demand curve illustrates a relationship between

Accepted Answer

A)  interest rates and income levels 
B)  the price level and real GDP 
C)  the price level and interest rates 
D)  income levels and real GDP levels 
E)  income levels and nominal income levels 
A)  interest rates and income levels 
B)  the price level and real GDP 
C)  the price level and interest rates 
D)  income levels and real GDP levels 
E)  income levels and nominal income levels

Question 6

If the economy is currently at equilibrium at $1 trillion and the MPC is 0.6,a $100 decrease in government purchases of goods and services will result in a new equilibrium at

Accepted Answer

A)  $600 billion 
B)  $400 billion 
C)  $750 billion 
D)  $1.4 trillion 
E)  $1.6 trillion 
A)  $600 billion 
B)  $400 billion 
C)  $750 billion 
D)  $1.4 trillion 
E)  $1.6 trillion

Question 7

If the marginal propensity to consume is 4/5,the simple multiplier is

Accepted Answer

A)  1/6 
B)  6 
C)  5/6 
D)  6/5 
E)  5 
A)  1/6 
B)  6 
C)  5/6 
D)  6/5 
E)  5

Question 8

The smaller the marginal propensity to save,other things constant,

Accepted Answer

A)  the smaller the marginal propensity to consume 
B)  the smaller the multiplier 
C)  the flatter the consumption function 
D)  the steeper the consumption function 
E)  the steeper the saving function 
A)  the smaller the marginal propensity to consume 
B)  the smaller the multiplier 
C)  the flatter the consumption function 
D)  the steeper the consumption function 
E)  the steeper the saving function

Question 9

Other things being equal,a decrease in an economy's exports will

Accepted Answer

A)  increase domestic aggregate expenditures and the equilibrium level of output 
B)  decrease domestic aggregate expenditures and the equilibrium level of output 
C)  have no impact on domestic aggregate expenditures or output 
D)  decrease the marginal propensity to import 
E)  change autonomous consumption 
A)  increase domestic aggregate expenditures and the equilibrium level of output 
B)  decrease domestic aggregate expenditures and the equilibrium level of output 
C)  have no impact on domestic aggregate expenditures or output 
D)  decrease the marginal propensity to import 
E)  change autonomous consumption

A decrease in the price level will

The economy will expand if

On the aggregate expenditure graph,if autonomous saving increases by $15 billion,

Which of the following is true about the relationship between the aggregate demand curve and the aggregate expenditure line?

The aggregate demand curve illustrates a relationship between

If the economy is currently at equilibrium at $1 trillion and the MPC is 0.6,a $100 decrease in government purchases of goods and services will result in a new equilibrium at

If the marginal propensity to consume is 4/5,the simple multiplier is

The smaller the marginal propensity to save,other things constant,

Other things being equal,a decrease in an economy's exports will

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Productivity and Growth

Tracking the US Economy

Unemployment and Inflation

Aggregate Expenditure

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Developing and Transitional Economies

Understanding Graphs

National Income Accounts

Variable Net Exports

Variable Net Exports Revisited

The Algebra of Income and Expenditure

The Algebra of Demand-Side Equilibrium

Filters

Exam 10: Aggregate Expenditure and Aggregate Demand

A decrease in the price level will

The economy will expand if

On the aggregate expenditure graph,if autonomous saving increases by $15 billion,

Which of the following is true about the relationship between the aggregate demand curve and the aggregate expenditure line?

The aggregate demand curve illustrates a relationship between

If the economy is currently at equilibrium at $1 trillion and the MPC is 0.6,a $100 decrease in government purchases of goods and services will result in a new equilibrium at

If the marginal propensity to consume is 4/5,the simple multiplier is

The smaller the marginal propensity to save,other things constant,

Other things being equal,a decrease in an economy's exports will

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Productivity and Growth

Tracking the US Economy

Unemployment and Inflation

Aggregate Expenditure

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Developing and Transitional Economies

Understanding Graphs

National Income Accounts

Variable Net Exports

Variable Net Exports Revisited

The Algebra of Income and Expenditure

The Algebra of Demand-Side Equilibrium

Filters