Question 1

The larger the MPC, the greater the multiplier effect.

Accepted Answer

A) True 
 B)False

Question 2

Movement along the aggregate demand curve may be caused by a change in autonomous investment spending.

Accepted Answer

A) True 
 B)False

Question 3

If households save $40 billion less at each level of income and the MPC = 0.8, the aggregate expenditure line will

Accepted Answer

A) not be affected 
B) shift upward by $40 billion 
C) shift downward by $40 billion 
D) shift upward by $200 billion because of the multiplier 
E) shift downward by $200 billion because of the multiplier 
A) not be affected 
B) shift upward by $40 billion 
C) shift downward by $40 billion 
D) shift upward by $200 billion because of the multiplier 
E) shift downward by $200 billion because of the multiplier

Question 4

An increase in autonomous investment will

Accepted Answer

A) shift the aggregate expenditure line upward 
B) shift the aggregate expenditure line downward 
C) result in an upward movement along the aggregate expenditure line 
D) result in a downward movement along the aggregate expenditure line 
E) increase aggregate expenditures only at high levels of income 
A) shift the aggregate expenditure line upward 
B) shift the aggregate expenditure line downward 
C) result in an upward movement along the aggregate expenditure line 
D) result in a downward movement along the aggregate expenditure line 
E) increase aggregate expenditures only at high levels of income

Question 5

Suppose that a pair of graphs represents a situation in which the aggregate expenditure line has shifted but the aggregate demand curve has not. The shift of the aggregate expenditure line was caused by a change in

Accepted Answer

A) the marginal propensity to consume 
B) the price level 
C) autonomous investment 
D) autonomous saving 
E) disposable income 
A) the marginal propensity to consume 
B) the price level 
C) autonomous investment 
D) autonomous saving 
E) disposable income

Question 6

Aggregate expenditure means total or combined spending.

Accepted Answer

A) True 
 B)False

Question 7

On the aggregate expenditure graph, if autonomous investment increases by $20 billion,

Accepted Answer

A) the aggregate expenditure line shifts upward by $20 billion 
B) planned saving increases by $20 billion 
C) the aggregate expenditure line shifts downward by $20 billion 
D) planned saving decreases by $20 billion 
E) the equilibrium level of real GDP demanded increases by $20 billion 
A) the aggregate expenditure line shifts upward by $20 billion 
B) planned saving increases by $20 billion 
C) the aggregate expenditure line shifts downward by $20 billion 
D) planned saving decreases by $20 billion 
E) the equilibrium level of real GDP demanded increases by $20 billion

Question 8

If the price level increases, other things constant, consumption spending

Accepted Answer

A) increases because real income rises 
B) decreases because real income rises 
C) increases because the real value of wealth increases 
D) decreases because the real value of wealth decreases 
E) increases because nominal income increases 
A) increases because real income rises 
B) decreases because real income rises 
C) increases because the real value of wealth increases 
D) decreases because the real value of wealth decreases 
E) increases because nominal income increases

The larger the MPC, the greater the multiplier effect.

Movement along the aggregate demand curve may be caused by a change in autonomous investment spending.

If households save $40 billion less at each level of income and the MPC = 0.8, the aggregate expenditure line will

An increase in autonomous investment will

Suppose that a pair of graphs represents a situation in which the aggregate expenditure line has shifted but the aggregate demand curve has not. The shift of the aggregate expenditure line was caused by a change in

Aggregate expenditure means total or combined spending.

On the aggregate expenditure graph, if autonomous investment increases by $20 billion,

If the price level increases, other things constant, consumption spending

The Art and Science of Economic Analysis

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 11: Aggregate Expenditure and Aggregate Demand

The larger the MPC, the greater the multiplier effect.

Movement along the aggregate demand curve may be caused by a change in autonomous investment spending.

If households save $40 billion less at each level of income and the MPC = 0.8, the aggregate expenditure line will

An increase in autonomous investment will

Suppose that a pair of graphs represents a situation in which the aggregate expenditure line has shifted but the aggregate demand curve has not. The shift of the aggregate expenditure line was caused by a change in

Aggregate expenditure means total or combined spending.

On the aggregate expenditure graph, if autonomous investment increases by $20 billion,

If the price level increases, other things constant, consumption spending

The Art and Science of Economic Analysis

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters