Question 1

If net taxes decrease,which of the following would occur?

Accepted Answer

A)  Disposable income decreases,consumption at any income level increases,and the consumption-income line shifts upward. 
B)  Disposable income increases,consumption at any income level increases,and the consumption-income line shifts downward. 
C)  Disposable income increases,consumption at any income level increases,and the consumption-income line shifts upward. 
D)  Disposable income decreases,consumption at any income level decreases,and the consumption-income line shifts downward. 
E)  Disposable income increases,consumption at any income level decreases,and the consumption-income line shifts downward. 
A)  Disposable income decreases,consumption at any income level increases,and the consumption-income line shifts upward. 
B)  Disposable income increases,consumption at any income level increases,and the consumption-income line shifts downward. 
C)  Disposable income increases,consumption at any income level increases,and the consumption-income line shifts upward. 
D)  Disposable income decreases,consumption at any income level decreases,and the consumption-income line shifts downward. 
E)  Disposable income increases,consumption at any income level decreases,and the consumption-income line shifts downward.

Question 2

In the short-run macro model,cyclical unemployment is caused by insufficient spending.

Accepted Answer

A) True 
 B)False

Question 3

The short-run macro model is used most often to determine changes in

Accepted Answer

A)  nominal output 
B)  net output 
C)  gross output 
D)  financial output 
E)  real output. 
A)  nominal output 
B)  net output 
C)  gross output 
D)  financial output 
E)  real output.

Question 4

Everything else being equal,a higher interest rate

Accepted Answer

A)  increases consumption spending as people face increasing debt 
B)  reduces consumption spending as people have a greater incentive to save 
C)  does not change consumption spending because consumption is only affected by income 
D)  does not change total consumption spending,but does change who does the spending 
E)  reduces both consumption spending and saving as people face increased debt 
A)  increases consumption spending as people face increasing debt 
B)  reduces consumption spending as people have a greater incentive to save 
C)  does not change consumption spending because consumption is only affected by income 
D)  does not change total consumption spending,but does change who does the spending 
E)  reduces both consumption spending and saving as people face increased debt

Question 5

Aggregate expenditure is the sum of

Accepted Answer

A)  all types of spending by households and firms 
B)  spending and savings by households 
C)  spending by households and governments on final goods and services 
D)  spending by households,government,firms,and foreigners on final goods and services 
E)  all spending and saving by households,firms,and governments 
A)  all types of spending by households and firms 
B)  spending and savings by households 
C)  spending by households and governments on final goods and services 
D)  spending by households,government,firms,and foreigners on final goods and services 
E)  all spending and saving by households,firms,and governments

Question 6

If net taxes were lowered from $5,000 to $1,000,the marginal propensity to consume is 0.75,and autonomous consumption spending is $10,000,by how much would consumption increase?

Accepted Answer

A)  $3,000 
B)  $1,250 
C)  $7,500 
D)  $3,750 
E)  $750 
A)  $3,000 
B)  $1,250 
C)  $7,500 
D)  $3,750 
E)  $750

Exam 23: The Short-Run Macro Model

If net taxes decrease,which of the following would occur?

In the short-run macro model,cyclical unemployment is caused by insufficient spending.

The short-run macro model is used most often to determine changes in

Everything else being equal,a higher interest rate

Aggregate expenditure is the sum of

If net taxes were lowered from $5,000 to $1,000,the marginal propensity to consume is 0.75,and autonomous consumption spending is $10,000,by how much would consumption increase?

What Is Economics

Scarcity,choice,and Economic Systems

Scarcity, choice, and Economic Systems: Part A

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

Perfect Competition: Part A

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

labor Markets: Part A

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

What Macroeconomics Tries to Explain

Production, income, and Employment

The Price Level and Inflation

The Classical Long-Run Model

Part A: The Classical Model in an Open Economy

Economic Growth and Rising Living Standards

Economic Fluctuations

Fiscal Policy

Money,banks,and the Federal Reserve

The Money Market and Monetary Policy

Feedback Effects From GDP to the Money Market

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Appendix-finding Equilibrium GDP Algebraically

Appendix: Capital and Leverage

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