Question 1

-Refer to the above diagram for a private closed economy.Unplanned investment in inventories will:

Accepted Answer

A)  occur at all levels of GDP in excess of $200. 
B)  occur at all levels of GDP in excess of $600. 
C)  occur at all levels of GDP below $600. 
D)  not occur because the economy is necessarily in equilibrium. 
A)  occur at all levels of GDP in excess of $200. 
B)  occur at all levels of GDP in excess of $600. 
C)  occur at all levels of GDP below $600. 
D)  not occur because the economy is necessarily in equilibrium.

Question 2

The letters Y,C,IS1U1B1gS1U1B0,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars.
C = 26 + .75Y
IS1U1B1gS1U1B0 = 60
X = 24
M = 10
-Refer to the above information.If the economy's tax schedule was T = 0.2Y rather than T = T0 = 30,the equilibrium GDP would be:

Accepted Answer

A)  $387.3. 
B)  $518.5. 
C)  $316 
D)  $412 
A)  $387.3. 
B)  $518.5. 
C)  $316 
D)  $412

Question 3

For an open mixed economy the equilibrium level of GDP is determined where Sa + Ig + X = T +G.

Accepted Answer

A) True 
 B)False

Question 4

-Refer to the above diagram for a private closed economy.In this economy investment:

Accepted Answer

A)  decreases as GDP increases. 
B)  increases as GDP increases. 
C)  is $40 billion at all levels of GDP. 
D)  is $60 billion at all levels of GDP. 
A)  decreases as GDP increases. 
B)  increases as GDP increases. 
C)  is $40 billion at all levels of GDP. 
D)  is $60 billion at all levels of GDP.

Question 5

Planned investment is $75 billion and saving is $62 billion in a private closed economy.In equilibrium actual investment must be:

Accepted Answer

A)  $13 billion. 
B)  $75 billion. 
C)  $62 billion. 
D)  minus $13 billion. 
A)  $13 billion. 
B)  $75 billion. 
C)  $62 billion. 
D)  minus $13 billion.

Question 6

-In the economy in the above diagram,international trade:

Accepted Answer

A)  does not occur. 
B)  has a contractionary effect on GDP. 
C)  has an expansionary effect on GDP. 
D)  has no impact on GDP. 
A)  does not occur. 
B)  has a contractionary effect on GDP. 
C)  has an expansionary effect on GDP. 
D)  has no impact on GDP.

Question 7

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

Accepted Answer

A)  a $20 billion increase in taxes 
B)  $20 billion increases in both government spending and taxes 
C)  $20 billion decreases in both government spending and taxes 
D)  a $20 billion decrease in government spending 
A)  a $20 billion increase in taxes 
B)  $20 billion increases in both government spending and taxes 
C)  $20 billion decreases in both government spending and taxes 
D)  a $20 billion decrease in government spending

Question 8

A recessionary expenditure gap in a mixed open economy can be measured as the extent to which aggregate expenditures fall short of those required to achieve the full-employment GDP.

Accepted Answer

A) True 
 B)False

Question 9

Other things equal,serious recession in the economies of Canada's trading partners will:

Accepted Answer

A)  have no perceptible impact on the Canadian economy. 
B)  cause inflation in the Canadian economy. 
C)  depress real output and employment in the Canadian economy. 
D)  stimulate real output and employment in the Canadian economy. 
A)  have no perceptible impact on the Canadian economy. 
B)  cause inflation in the Canadian economy. 
C)  depress real output and employment in the Canadian economy. 
D)  stimulate real output and employment in the Canadian economy.

Question 10

Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged.

Accepted Answer

A) True 
 B)False

-Refer to the above diagram for a private closed economy.Unplanned investment in inventories will:

For an open mixed economy the equilibrium level of GDP is determined where S_a + I_g + X = T +G.

-Refer to the above diagram for a private closed economy.In this economy investment:

Planned investment is $75 billion and saving is $62 billion in a private closed economy.In equilibrium actual investment must be:

-In the economy in the above diagram,international trade:

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

A recessionary expenditure gap in a mixed open economy can be measured as the extent to which aggregate expenditures fall short of those required to achieve the full-employment GDP.

Other things equal,serious recession in the economies of Canada's trading partners will:

Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

Exam 11: The Aggregate Expenditures Model

-Refer to the above diagram for a private closed economy.Unplanned investment in inventories will:

For an open mixed economy the equilibrium level of GDP is determined where Sa + Ig + X = T +G.

-Refer to the above diagram for a private closed economy.In this economy investment:

Planned investment is $75 billion and saving is $62 billion in a private closed economy.In equilibrium actual investment must be:

-In the economy in the above diagram,international trade:

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

A recessionary expenditure gap in a mixed open economy can be measured as the extent to which aggregate expenditures fall short of those required to achieve the full-employment GDP.

Other things equal,serious recession in the economies of Canada's trading partners will:

Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

For an open mixed economy the equilibrium level of GDP is determined where S_a + I_g + X = T +G.