Exam 30: The Aggregate Expenditures Model

(Advanced analysis)Answer the question on the basis of the following information for a private open economy.The letters Y,C,I_g,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars. C=26+0.75Y =60 X=24 M=10 The equilibrium GDP for the open economy is:

If the MPC in an economy is .75,a $1 billion increase in taxes will ultimately reduce consumption by:

(Advanced analysis)Answer the question on the basis of the following information for a private open economy.The letters Y,C,I_g,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars. C=26+0.75Y =60 X=24 M=10 The multiplier for the economy is:

(Advanced analysis)Answer the question on the basis of the following data for a private closed economy.The letters Y,C,S,and I are used to represent real GDP,consumption,saving,and investment respectively. \ \ 0 \ 60 \ 30 100 120 40 200 180 50 300 240 60 400 300 70 500 360 80 The equation representing the consumption schedule for the economy is:

If a nation imposes tariffs and quotas on foreign products,the immediate effect will be to:

John Maynard Keynes created the aggregate expenditures model based primarily on what historical event?

The aggregate expenditures model is built upon which of the following assumptions?

It is true that:

Graphically,the height of the investment schedule depends on the real interest rate,together with the location of the investment demand curve.

(Advanced analysis)Answer the question on the basis of the following information for a private closed economy,where I_g is gross investment,S is saving,and Y is gross domestic product (GDP). ==80 =-80+0.4 Refer to the information.In equilibrium,consumption will be:

In the private closed economy,equilibrium GDP occurs where C + I_g = GDP.

A private closed economy includes:

Actual investment equals saving:

Other things equal,the multiplier effect associated with a change in government spending is:

Which of the following would increase GDP by the greatest amount?

Exports have the same effect on the current size of GDP as:

If net exports are positive:

The following information is for a closed economy: \ 100 200 300 400 500 600 700 \ 100 160 220 280 340 400 460 \ 0 40 80 120 160 200 240 \ 80 80 80 80 80 80 80 Refer to the information.The addition of a $100 billion lump-sum tax:

Which of the following statements is correct for a private closed economy?

Saving is always equal to: