Question 1

Imports have the same macroeconomic effect on GDP as:

Accepted Answer

A)  exports. 
B)  investment. 
C)  consumption. 
D)  saving. 
A)  exports. 
B)  investment. 
C)  consumption. 
D)  saving.

Question 2

-Refer to the above diagram where Ig is gross investment,X is exports,G is government purchases,S and Sa are saving before and after taxes respectively,M is imports,and T is net taxes,that is,taxes less transfers.The effect of the public budget is to:

Accepted Answer

A)  lower the equilibrium level of GDP from Y4 to Y2. 
B)  raise the equilibrium level of GDP from Y2 to Y4. 
C)  lower the equilibrium level of GDP from Y4 to Y3. 
D)  raise the equilibrium level of GDP from Y2 to Y3. 
A)  lower the equilibrium level of GDP from Y4 to Y2. 
B)  raise the equilibrium level of GDP from Y2 to Y4. 
C)  lower the equilibrium level of GDP from Y4 to Y3. 
D)  raise the equilibrium level of GDP from Y2 to Y3.

Question 3

The investment schedule tends to be relatively stable over time.

Accepted Answer

A) True 
 B)False

Question 4

If the dollar appreciates relative to foreign currencies,we would expect:

Accepted Answer

A)  the multiplier to decrease. 
B)  a country's exports and imports to both fall. 
C)  a country's net exports to rise. 
D)  a country's net exports to fall. 
A)  the multiplier to decrease. 
B)  a country's exports and imports to both fall. 
C)  a country's net exports to rise. 
D)  a country's net exports to fall.

Question 5

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
-The equilibrium level of GDP for the above open economy is:

Accepted Answer

A)  $390 
B)  $375 
C)  $320 
D)  $400 
A)  $390 
B)  $375 
C)  $320 
D)  $400

Question 6

-Refer to the above diagram for a private closed economy.At the $100 level of GDP:

Accepted Answer

A)  aggregate expenditures will exceed GDP,causing GDP to fall. 
B)  planned investment will exceed saving,but actual investment will be equal to saving. 
C)  households will consume more than their income. 
D)  saving will be $40. 
A)  aggregate expenditures will exceed GDP,causing GDP to fall. 
B)  planned investment will exceed saving,but actual investment will be equal to saving. 
C)  households will consume more than their income. 
D)  saving will be $40.

Question 7

If Canada wants to increase its net exports,other things equal,it might take steps to:

Accepted Answer

A)  increase its GDP. 
B)  reduce existing tariffs and import quotas. 
C)  decrease the dollar price of foreign currencies. 
D)  increase the dollar price of foreign currencies. 
A)  increase its GDP. 
B)  reduce existing tariffs and import quotas. 
C)  decrease the dollar price of foreign currencies. 
D)  increase the dollar price of foreign currencies.

Question 8

For a private closed economy,an unplanned decline in inventories suggests that:

Accepted Answer

A)  aggregate expenditures are less than the business sector expected them to be. 
B)  planned investment is greater than saving. 
C)  actual investment exceeds saving. 
D)  planned investment is greater than consumption. 
A)  aggregate expenditures are less than the business sector expected them to be. 
B)  planned investment is greater than saving. 
C)  actual investment exceeds saving. 
D)  planned investment is greater than consumption.

Question 9

Refer to the diagram below.The multiplier in this economy is:

Accepted Answer

A)  0E/0A. 
B)  BD/FG. 
C)  FG/BD. 
D)  BD/AD. 
A)  0E/0A. 
B)  BD/FG. 
C)  FG/BD. 
D)  BD/AD.

Question 10

The letters Y,C,S,and I are used to represent GDP,consumption,saving,and investment respectively.
  
-The equation representing the investment schedule for the above economy is:

Accepted Answer

A)  I = .3Y. 
B)  I = 80 -.3Y. 
C)  I = 30 + .1Y. 
D)  I = I0 = 30. 
A)  I = .3Y. 
B)  I = 80 -.3Y. 
C)  I = 30 + .1Y. 
D)  I = I0 = 30.

Question 11

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

Accepted Answer

A)  decrease by $50 billion. 
B)  decrease by $150 billion. 
C)  remain unchanged since spending on military goods is unproductive and usually wasteful. 
D)  decrease by $25 billion. 
A)  decrease by $50 billion. 
B)  decrease by $150 billion. 
C)  remain unchanged since spending on military goods is unproductive and usually wasteful. 
D)  decrease by $25 billion.

Question 12

The equilibrium level of GDP always coincides with the full-employment GDP.

Accepted Answer

A) True 
 B)False

Question 13

During the recession of 2008 - 2009:

Accepted Answer

A)  the federal government undertook various policies intended to stimulate private spending and investment. 
B)  the federal government undertook various policies that ultimately resulted in an inflationary expenditure gap. 
C)  the federal government was able to achieve a balanced budget even though it undertook various policies to stimulate the economy. 
D)  the federal government took no action to stimulate the economy,and instead left it to the private sector to try to eliminate the recessionary gap. 
A)  the federal government undertook various policies intended to stimulate private spending and investment. 
B)  the federal government undertook various policies that ultimately resulted in an inflationary expenditure gap. 
C)  the federal government was able to achieve a balanced budget even though it undertook various policies to stimulate the economy. 
D)  the federal government took no action to stimulate the economy,and instead left it to the private sector to try to eliminate the recessionary gap.

Question 14

Cyclical unemployment in Canada is essentially the consequence of:

Accepted Answer

A)  procyclical fiscal policies. 
B)  a deficient level of aggregate expenditures. 
C)  rapid technological progress. 
D)  the geographic immobility of the labor force. 
A)  procyclical fiscal policies. 
B)  a deficient level of aggregate expenditures. 
C)  rapid technological progress. 
D)  the geographic immobility of the labor force.

Question 15

A lump-sum tax causes the after-tax consumption schedule:

Accepted Answer

A)  and the before-tax consumption schedule to coincide. 
B)  to be steeper than the before-tax consumption schedule. 
C)  to be flatter than the before-tax consumption schedule. 
D)  to be parallel to the before-tax consumption schedule. 
A)  and the before-tax consumption schedule to coincide. 
B)  to be steeper than the before-tax consumption schedule. 
C)  to be flatter than the before-tax consumption schedule. 
D)  to be parallel to the before-tax consumption schedule.

Question 16

Assuming the MPC is .75,an equal $10 billion increases in government spending and tax collections will:

Accepted Answer

A)  leave the equilibrium GDP unchanged. 
B)  increase the equilibrium GDP by $10 billion. 
C)  increase the equilibrium GDP by $2.5 billion. 
D)  reduce the equilibrium GDP by $10 billion. 
A)  leave the equilibrium GDP unchanged. 
B)  increase the equilibrium GDP by $10 billion. 
C)  increase the equilibrium GDP by $2.5 billion. 
D)  reduce the equilibrium GDP by $10 billion.

Question 17

Which of the following is a correct statement of the impacts of a lump-sum tax?

Accepted Answer

A)  Disposable income will increase by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC. 
B)  Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the multiplier. 
C)  Disposable income will decline by the amount of the tax and consumption at each level of GDP will also decline by the amount of the tax. 
D)  Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC. 
A)  Disposable income will increase by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC. 
B)  Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the multiplier. 
C)  Disposable income will decline by the amount of the tax and consumption at each level of GDP will also decline by the amount of the tax. 
D)  Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC.

Question 18

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.The multiplier for this economy:

Accepted Answer

A)  is 4. 
B)  is 3. 
C)  is 2. 
D)  is 2.33. 
A)  is 4. 
B)  is 3. 
C)  is 2. 
D)  is 2.33.

Question 19

Refer to the diagram below for a private closed economy.At income level D:

Accepted Answer

A)  planned investment is GH. 
B)  unplanned investment is GH. 
C)  unplanned disinvestment is GH. 
D)  saving equals planned investment. 
A)  planned investment is GH. 
B)  unplanned investment is GH. 
C)  unplanned disinvestment is GH. 
D)  saving equals planned investment.

Question 20

-Refer to the above diagram.International trade has an expansionary effect on this economy.

Accepted Answer

A) True 
 B)False

Imports have the same macroeconomic effect on GDP as:

-Refer to the above diagram where I_g is gross investment,X is exports,G is government purchases,S and S_a are saving before and after taxes respectively,M is imports,and T is net taxes,that is,taxes less transfers.The effect of the public budget is to:

The investment schedule tends to be relatively stable over time.

If the dollar appreciates relative to foreign currencies,we would expect:

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 + .75Y I_g = 60 X = 24 M = 10 -The equilibrium level of GDP for the above open economy is:

-Refer to the above diagram for a private closed economy.At the $100 level of GDP:

If Canada wants to increase its net exports,other things equal,it might take steps to:

For a private closed economy,an unplanned decline in inventories suggests that:

Refer to the diagram below.The multiplier in this economy is:

The letters Y,C,S,and I are used to represent GDP,consumption,saving,and investment respectively. -The equation representing the investment schedule for the above economy is:

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

The equilibrium level of GDP always coincides with the full-employment GDP.

During the recession of 2008 - 2009:

Cyclical unemployment in Canada is essentially the consequence of:

A lump-sum tax causes the after-tax consumption schedule:

Assuming the MPC is .75,an equal $10 billion increases in government spending and tax collections will:

Which of the following is a correct statement of the impacts of a lump-sum tax?

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 + .75Y I_g = 60 X = 24 M = 10 -Refer to the above information.The multiplier for this economy:

Refer to the diagram below for a private closed economy.At income level D:

-Refer to the above diagram.International trade has an expansionary effect on this economy.

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

Imports have the same macroeconomic effect on GDP as:

-Refer to the above diagram where Ig is gross investment,X is exports,G is government purchases,S and Sa are saving before and after taxes respectively,M is imports,and T is net taxes,that is,taxes less transfers.The effect of the public budget is to:

The investment schedule tends to be relatively stable over time.

If the dollar appreciates relative to foreign currencies,we would expect:

The letters Y,C,Ig,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars. C = 26 + .75Y Ig = 60 X = 24 M = 10 -The equilibrium level of GDP for the above open economy is:

-Refer to the above diagram for a private closed economy.At the $100 level of GDP:

If Canada wants to increase its net exports,other things equal,it might take steps to:

For a private closed economy,an unplanned decline in inventories suggests that:

Refer to the diagram below.The multiplier in this economy is:

The letters Y,C,S,and I are used to represent GDP,consumption,saving,and investment respectively. -The equation representing the investment schedule for the above economy is:

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

The equilibrium level of GDP always coincides with the full-employment GDP.

During the recession of 2008 - 2009:

Cyclical unemployment in Canada is essentially the consequence of:

A lump-sum tax causes the after-tax consumption schedule:

Assuming the MPC is .75,an equal $10 billion increases in government spending and tax collections will:

Which of the following is a correct statement of the impacts of a lump-sum tax?

The letters Y,C,Ig,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars. C = 26 + .75Y Ig = 60 X = 24 M = 10 -Refer to the above information.The multiplier for this economy:

Refer to the diagram below for a private closed economy.At income level D:

-Refer to the above diagram.International trade has an expansionary effect on this economy.

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

-Refer to the above diagram where I_g is gross investment,X is exports,G is government purchases,S and S_a are saving before and after taxes respectively,M is imports,and T is net taxes,that is,taxes less transfers.The effect of the public budget is to:

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 + .75Y I_g = 60 X = 24 M = 10 -The equilibrium level of GDP for the above open economy is:

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 + .75Y I_g = 60 X = 24 M = 10 -Refer to the above information.The multiplier for this economy: