Question 1

If economists forecast a decrease in aggregate expenditure, which of the following is likely to occur?

Accepted Answer

A)  GDP will rise. 
B)  GDP will fall. 
C)  Wages will rise. 
D)  Inventories will fall. 
A)  GDP will rise. 
B)  GDP will fall. 
C)  Wages will rise. 
D)  Inventories will fall.

Question 2

A decrease in ________ can put your job at risk if aggregate expenditures fall.

Accepted Answer

A)  consumer confidence 
B)  the natural rate of unemployment 
C)  the inflation rate 
D)  the length of a business cycle 
A)  consumer confidence 
B)  the natural rate of unemployment 
C)  the inflation rate 
D)  the length of a business cycle

Question 3

If aggregate expenditure is more than GDP, then inventories fall and GDP rises.

Accepted Answer

A) True 
 B)False

Question 4

Economists think that the marginal propensity to consume for the U.S. economy is somewhere around 0.9. Based on our simple multiplier formula, this would imply that the multiplier for the United States should be around 10. However, economists agree that the spending multiplier is closer to 2. What might explain this supposed anomaly?

Accepted Answer

The formula for the multiplier, M = @#IMG-DLM& , i

Question 5

________ is defined as the value of a household's assets minus the value of its liabilities.

Accepted Answer

A)  Household income 
B)  Household wealth 
C)  Personal household consumption 
D)  Planned household investment 
A)  Household income 
B)  Household wealth 
C)  Personal household consumption 
D)  Planned household investment

Question 6

Given the equations for C, I, G, and NX below, what is the marginal propensity to consume? C = 1,000 + 0.8Y
I = 1,500
G=1,250
NX = 100

Accepted Answer

A)  0.2 
B)  0.8 
C)  1.8 
D)  10 
A)  0.2 
B)  0.8 
C)  1.8 
D)  10

If economists forecast a decrease in aggregate expenditure, which of the following is likely to occur?

A decrease in ________ can put your job at risk if aggregate expenditures fall.

If aggregate expenditure is more than GDP, then inventories fall and GDP rises.

________ is defined as the value of a household's assets minus the value of its liabilities.

Given the equations for C, I, G, and NX below, what is the marginal propensity to consume? C = 1,000 + 0.8Y I = 1,500 G=1,250 NX = 100

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 23: Aggregate Expenditure and Output in the Short Run

If economists forecast a decrease in aggregate expenditure, which of the following is likely to occur?

A decrease in ________ can put your job at risk if aggregate expenditures fall.

If aggregate expenditure is more than GDP, then inventories fall and GDP rises.

________ is defined as the value of a household's assets minus the value of its liabilities.

Given the equations for C, I, G, and NX below, what is the marginal propensity to consume? C = 1,000 + 0.8Y I = 1,500 G=1,250 NX = 100

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters