Exam 22: Adding Government and Trade to the Simple Macro Model

The table below shows national income and imports.The level of exports is fixed at $300.All figures (in table and questions)are in millions of dollars. TABLE 22-1 -Refer to Table 22-1.What is the marginal propensity to import?

The table below shows national income and imports.The level of exports is fixed at $300.All figures (in table and questions)are in millions of dollars. TABLE 22-1 -Refer to Table 22-1.In this economy,if actual national income increases by $600,the level of imports will

Consider the simplest macro model with demand-determined output.The equations are: C = 150 + 0.8Yd,Yd = Y-T,I = 400,G = 700,T = .2Y,X = 130,and IM = 0.14Y.Autonomous expenditures in this model are

Consider a consumption function in a simple macro model with government and taxes.Given a marginal propensity to consume out of disposable income of 0.9 and a net tax rate of 10% of national income,the marginal propensity to consume out of national income is

If the price level is taken as given in a simple macro model with demand-determined output,it is implicitly being assumed that

Consider the simplest macro model with demand-determined output.The equations are: C = 150 + 0.8Yd,Yd = Y -T,I = 400,G = 700,T = .2Y,X = 130,and IM = 0.14Y.The marginal propensity to spend on national income in this model is

Consider the government's budget balance.Suppose G = 300 and the government's net tax revenue is 0.3Y.The government budget is in surplus only when Y is

The diagrams below show the import,export,and net export functions for an economy. FIGURE 22-1 -Refer to Figure 22-1.The function for desired imports for this economy can be expressed as

Suppose exports (X)=100,Y=500,and imports are equal to mY,where m is the marginal propensity to import.Net exports would be equal to zero if the marginal propensity to import were

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: ∙ marginal propensity to consume (mpc)= 0.75 ∙ net tax rate (t)= 0.20 ∙ no foreign trade ∙ fixed price level ∙ all expenditure and income figures are in billions of dollars. FIGURE 22-2 -Refer to Figure 22-2.What is the marginal propensity to spend (z)in this economy?

Consider the government's budget balance.Suppose G = 2500 and the government's net tax revenue is equal to 0.2Y.When Y = 11 000,the government is running a budget

A downward shift and steepening of the net export (NX)function can be caused by

We would expect real national income to be "demand determined" when 1)there is large-scale unemployment of resources in the economy; 2)firms are price setters; 3)firms have excess capacity.

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: ∙ marginal propensity to consume (mpc)= 0.75 ∙ net tax rate (t)= 0.20 ∙ no foreign trade ∙ fixed price level ∙ all expenditure and income figures are in billions of dollars. FIGURE 22-2 -Refer to Figure 22-2.Which of the following equations describes the aggregate expenditure function for this economy?

In an open economy with government and demand-determined output,an increase in the equilibrium level of national income could be caused by

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: ∙ marginal propensity to consume (mpc)= 0.75 ∙ net tax rate (t)= 0.20 ∙ no foreign trade ∙ fixed price level ∙ all expenditure and income figures are in billions of dollars. FIGURE 22-2 -Refer to Figure 22-2.What is the level of autonomous consumption?

An upward shift and flattening of the net export (NX)function can be caused by

When determining the AE function for an open economy with government,it is generally assumed that as real national income

A fall in the Canadian-dollar price of foreign currency,other things being equal,causes Canada's net export (NX)function to shift ________ and ________.

Consider the net tax rate,denoted by t.Which of the following correctly defines the net tax rate?