The following information is for a closed economy: $\begin{array}{c} \begin{array}{c} \underline{\text { GDP }} \\ \$ 100 \\ 200 \\ 300 \\ 400 \\ 500 \\ 600 \\ 700 \end{array} \begin{array}{c} \underline{\text { C }}\\ \$ 100 \\ 160 \\ 220 \\ 280 \\ 340 \\ 400 \\ 460 \end{array} \begin{array}{c} \underline{\text { S}} \\ \$ 0 \\ 40 \\ 80 \\ 120 \\ 160 \\ 200 \\ 240 \end{array} \begin{array}{c} I_{g} \\ \hline \$ 80 \\ 80 \\ 80 \\ 80 \\ 80 \\ 80 \\ 80 \end{array} \end{array}$ Refer to the information.If government spends $80 billion at each level of GDP,and imposes a lump-sum tax of $100:

A) equilibrium GDP will now be $350. B) equilibrium GDP will now be $400. C) equilibrium GDP will now be $300. D) the equilibrium GDP cannot be determined. A) equilibrium GDP will now be $350. B) equilibrium GDP will now be $400. C) equilibrium GDP will now be $300. D) the equilibrium GDP cannot be determined.

Complete the following table and answer the question on the basis of the resulting data.All figures are in billions of dollars. $\begin{array}{cccccc} \begin{array}{c} \text { Domestic } \\ \text { Output } \\ \underline{\text { (GDP = DI) }} \end{array} & \begin{array}{c} \text { Aggregate } \\ \text { Expenditures, } \\ \underline{\text { Closed Economy }} \end{array} & \begin{array}{c} \\ \\ \underline{\text { Exports }} \end{array} & \begin{array}{c}\\ \\ \underline{\text { Imports }} \end{array} & \begin{array}{c} \\ \text { Net } \\ \underline{\text { Exports }} \end{array} & \begin{array}{c} \text { Aggregate } \\ \text { Expenditures, } \\ \underline{\text { Open Economy }} \end{array} \\ \$ 200 & \$ 230 & \$ 30 & \$ 20 & \$- & \$- \\ 250 & 270 & 30 & 20 & -&- \\ 300 & 310 & 30 & 20 & - & - \\ 350 & 350 & 30 & 20 & - & - \\ 400 & 390 & 30 & 20 & - & - \\ 450 & 430 & 30 & 20 & - & - \\ 500 & 470 & 30 & 20 & - & - \end{array}$ Refer to the table.For the open economy,the equilibrium GDP and the multiplier are:

A) $300 and 2.5. B) $450 and 5. C) $400 and 4. D) $400 and 5. A) $300 and 2.5. B) $450 and 5. C) $400 and 4. D) $400 and 5.

Answer the question below on the basis of the following information for a private closed economy: \[\begin{array}{l} \begin{array} { c c } \underline{\text { Gross Domestic Product }} &\underline{ \text { Consumption }} \\ \$100& \$ 120 \\ 200 & 180 \\ 300 & 240 \\ 400 & 300 \\ 500 & 360 \end{array}\\ \begin{array} { c c } \underline{\text { Expected Rate of Return }} &\underline{ \text { Amount of Investment }} \\ 25 \% & \$ 0 \\ 20 & 20 \\ 15 & 40 \\ 10 & 60 \\ 5 & 80 \end{array} \end{array}\] Refer to the information.If the real interest rate is 20 percent,the equilibrium GDP will be:

A) $100. B) $200. C) $300. D) $400. A) $100. B) $200. C) $300. D) $400.

The following information is for a closed economy: $\begin{array}{c} \begin{array}{c} \underline{\text { GDP }} \\ \$ 100 \\ 200 \\ 300 \\ 400 \\ 500 \\ 600 \\ 700 \end{array} \begin{array}{c} \underline{\text { C }}\\ \$ 100 \\ 160 \\ 220 \\ 280 \\ 340 \\ 400 \\ 460 \end{array} \begin{array}{c} \underline{\text { S}} \\ \$ 0 \\ 40 \\ 80 \\ 120 \\ 160 \\ 200 \\ 240 \end{array} \begin{array}{c} I_{g} \\ \hline \$ 80 \\ 80 \\ 80 \\ 80 \\ 80 \\ 80 \\ 80 \end{array} \end{array}$ Refer to the information.If government now spends $80 billion at each level of GDP and taxes remain at zero,the equilibrium GDP:

A) will rise to $700. B) will rise to $600. C) will rise to $500. D) may either rise or fall. A) will rise to $700. B) will rise to $600. C) will rise to $500. D) may either rise or fall.

Answer the question below on the basis of the following information for a private closed economy: \[\begin{array}{l} \begin{array} { c c } \underline{\text { Gross Domestic Product }} &\underline{ \text { Consumption }} \\ \$100& \$ 120 \\ 200 & 180 \\ 300 & 240 \\ 400 & 300 \\ 500 & 360 \end{array}\\ \begin{array} { c c } \underline{\text { Expected Rate of Return }} &\underline{ \text { Amount of Investment }} \\ 25 \% & \$ 0 \\ 20 & 20 \\ 15 & 40 \\ 10 & 60 \\ 5 & 80 \end{array} \end{array}\] Refer to the information.The data suggest that:

A) the interest rate and the equilibrium GDP are directly related. B) the interest rate and the equilibrium GDP are inversely related. C) the interest rate and the equilibrium GDP are unrelated. D) as the interest rate falls,investment also falls. A) the interest rate and the equilibrium GDP are directly related. B) the interest rate and the equilibrium GDP are inversely related. C) the interest rate and the equilibrium GDP are unrelated. D) as the interest rate falls,investment also falls.

(Advanced analysis)Answer the question on the basis of the following information for a private closed economy. $\begin{array} { l } S = - 20 + 0.4 Y \\ I _ { g } = 25 - 3 i \end{array}$ where S is saving,Ig is gross investment,i is the real interest rate,and Y is GDP. Refer to the information.If the real interest rate is 5 (percent),investment will be:

A) $10 and the equilibrium GDP will be $75. B) $15 and the equilibrium GDP will be $100. C) $10 and the equilibrium GDP will be $120. D) $15 and the equilibrium GDP will be $180. A) $10 and the equilibrium GDP will be $75. B) $15 and the equilibrium GDP will be $100. C) $10 and the equilibrium GDP will be $120. D) $15 and the equilibrium GDP will be $180.

Exam 30: The Aggregate Expenditures Model

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.If government spends $80 billion at each level of GDP,and imposes a lump-sum tax of $100:

(Multiple Choice)

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Question 141

Complete the following table and answer the question on the basis of the resulting data.All figures are in billions of dollars. Domestic Output Aggregate Expenditures, Net Aggregate Expenditures, \ 200 \ 230 \ 30 \ 20 \- \- 250 270 30 20 - - 300 310 30 20 - - 350 350 30 20 - - 400 390 30 20 - - 450 430 30 20 - - 500 470 30 20 - - Refer to the table.For the open economy,the equilibrium GDP and the multiplier are:

(Multiple Choice)

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Question 142

Answer the question below on the basis of the following information for a private closed economy: \1 00 \ 120 200 180 300 240 400 300 500 360 25\% \ 0 20 20 15 40 10 60 5 80 Refer to the information.If the real interest rate is 20 percent,the equilibrium GDP will be:

(Multiple Choice)

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Question 143

Suppose the economy's multiplier is 2.Other things equal,a $25 billion decrease in government expenditures on national defense will cause equilibrium GDP to:

(Multiple Choice)

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Question 144

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

(Multiple Choice)

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Question 145

If government increases its purchases by $15 billion and the MPC is 2/3,then we would expect the equilibrium GDP to:

(Multiple Choice)

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Question 146

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.If government now spends $80 billion at each level of GDP and taxes remain at zero,the equilibrium GDP:

(Multiple Choice)

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Question 147

Which of the following statements is incorrect?

(Multiple Choice)

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Question 148

In the United States from 1929 to 1933,real GDP _ and the unemployment rate ____.

(Multiple Choice)

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Question 149

If the marginal propensity to consume is .9 in a private closed economy,a $20 billion decline in investment spending will decrease:

(Multiple Choice)

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Question 150

In an effort to stop the U.S.recession of 2007-2009,the federal government:

(Multiple Choice)

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Question 151

Suppose the economy is operating at its full-employment-noninflationary GDP and the MPC is .75.The federal government now finds that it must increase spending on military goods by $21 billion in response to deterioration in the international political situation.To sustain full-employment-noninflationary GDP,government must:

(Multiple Choice)

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Question 152

(Advanced analysis)Answer the question on the basis of the following consumption and investment data for a private closed economy.Figures are in billions of dollars. C = 60 + .6Y I = I₀ = 30 Refer to the data.In equilibrium,the level of saving will be:

(Multiple Choice)

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Question 153

If MPC = .5,a simultaneous increase in both taxes and government spending of $20 will:

(Multiple Choice)

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Question 154

An upward shift of the aggregate expenditures schedule might be caused by:

(Multiple Choice)

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Question 155

Answer the question below on the basis of the following information for a private closed economy: \1 00 \ 120 200 180 300 240 400 300 500 360 25\% \ 0 20 20 15 40 10 60 5 80 Refer to the information.The data suggest that:

(Multiple Choice)

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Question 156

Investment and saving are,respectively:

(Multiple Choice)

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Question 157

When investment remains the same at each level of GDP in a private closed economy,the slope of the aggregate expenditures schedule:

(Multiple Choice)

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Question 158

Answer the question on the basis of the following table: The tax in the economy is a:

(Multiple Choice)

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Question 159

(Advanced analysis)Answer the question on the basis of the following information for a private closed economy. S=-20+0.4Y =25-3i where S is saving,I_g is gross investment,i is the real interest rate,and Y is GDP. Refer to the information.If the real interest rate is 5 (percent),investment will be:

(Multiple Choice)

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Question 160

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.If government spends $80 billion at each level of GDP,and imposes a lump-sum tax of $100:

Answer the question below on the basis of the following information for a private closed economy: \1 00 \ 120 200 180 300 240 400 300 500 360 25\% \ 0 20 20 15 40 10 60 5 80 Refer to the information.If the real interest rate is 20 percent,the equilibrium GDP will be:

Suppose the economy's multiplier is 2.Other things equal,a $25 billion decrease in government expenditures on national defense will cause equilibrium GDP to:

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

If government increases its purchases by $15 billion and the MPC is 2/3,then we would expect the equilibrium GDP to:

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.If government now spends $80 billion at each level of GDP and taxes remain at zero,the equilibrium GDP:

Which of the following statements is incorrect?

In the United States from 1929 to 1933,real GDP _ and the unemployment rate ____.

If the marginal propensity to consume is .9 in a private closed economy,a $20 billion decline in investment spending will decrease:

In an effort to stop the U.S.recession of 2007-2009,the federal government:

(Advanced analysis)Answer the question on the basis of the following consumption and investment data for a private closed economy.Figures are in billions of dollars. C = 60 + .6Y I = I₀ = 30 Refer to the data.In equilibrium,the level of saving will be:

If MPC = .5,a simultaneous increase in both taxes and government spending of $20 will:

An upward shift of the aggregate expenditures schedule might be caused by:

Answer the question below on the basis of the following information for a private closed economy: \1 00 \ 120 200 180 300 240 400 300 500 360 25\% \ 0 20 20 15 40 10 60 5 80 Refer to the information.The data suggest that:

Investment and saving are,respectively:

When investment remains the same at each level of GDP in a private closed economy,the slope of the aggregate expenditures schedule:

Answer the question on the basis of the following table: The tax in the economy is a:

(Advanced analysis)Answer the question on the basis of the following information for a private closed economy. S=-20+0.4Y =25-3i where S is saving,I_g is gross investment,i is the real interest rate,and Y is GDP. Refer to the information.If the real interest rate is 5 (percent),investment will be:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters

Exam 30: The Aggregate Expenditures Model

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.If government spends $80 billion at each level of GDP,and imposes a lump-sum tax of $100:

Answer the question below on the basis of the following information for a private closed economy: \1 00 \ 120 200 180 300 240 400 300 500 360 25\% \ 0 20 20 15 40 10 60 5 80 Refer to the information.If the real interest rate is 20 percent,the equilibrium GDP will be:

Suppose the economy's multiplier is 2.Other things equal,a $25 billion decrease in government expenditures on national defense will cause equilibrium GDP to:

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

If government increases its purchases by $15 billion and the MPC is 2/3,then we would expect the equilibrium GDP to:

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.If government now spends $80 billion at each level of GDP and taxes remain at zero,the equilibrium GDP:

Which of the following statements is incorrect?

In the United States from 1929 to 1933,real GDP _____________ and the unemployment rate ________________.

If the marginal propensity to consume is .9 in a private closed economy,a $20 billion decline in investment spending will decrease:

In an effort to stop the U.S.recession of 2007-2009,the federal government:

(Advanced analysis)Answer the question on the basis of the following consumption and investment data for a private closed economy.Figures are in billions of dollars. C = 60 + .6Y I = I0 = 30 Refer to the data.In equilibrium,the level of saving will be:

If MPC = .5,a simultaneous increase in both taxes and government spending of $20 will:

An upward shift of the aggregate expenditures schedule might be caused by:

Answer the question below on the basis of the following information for a private closed economy: \1 00 \ 120 200 180 300 240 400 300 500 360 25\% \ 0 20 20 15 40 10 60 5 80 Refer to the information.The data suggest that:

Investment and saving are,respectively:

When investment remains the same at each level of GDP in a private closed economy,the slope of the aggregate expenditures schedule:

Answer the question on the basis of the following table: The tax in the economy is a:

(Advanced analysis)Answer the question on the basis of the following information for a private closed economy. S=-20+0.4Y =25-3i where S is saving,Ig is gross investment,i is the real interest rate,and Y is GDP. Refer to the information.If the real interest rate is 5 (percent),investment will be:

Income Inequality Poverty and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters

In the United States from 1929 to 1933,real GDP _ and the unemployment rate ____.

(Advanced analysis)Answer the question on the basis of the following consumption and investment data for a private closed economy.Figures are in billions of dollars. C = 60 + .6Y I = I₀ = 30 Refer to the data.In equilibrium,the level of saving will be:

(Advanced analysis)Answer the question on the basis of the following information for a private closed economy. S=-20+0.4Y =25-3i where S is saving,I_g is gross investment,i is the real interest rate,and Y is GDP. Refer to the information.If the real interest rate is 5 (percent),investment will be: