Exam 9: The Aggregate Expenditures Model

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The following information is consumption and investment data for a private closed economy. Figures are in billions of dollars. C = 60 + .6Y I = I0 = 30 -Refer to the above data. In equilibrium, the level of saving will be:

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The following information is consumption and investment data for a private closed economy. Figures are in billions of dollars. C = 60 + .6Y I = I0 = 30 -Refer to the above data. In equilibrium, the level of consumption spending will be:

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Cyclical unemployment in Canada is essentially the consequence of:

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  -The tax in the above economy is a: -The tax in the above economy is a:

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C = 40 + .8Y _ Ig = Ig = 40 _ X = X = 20 _ M = M = 30 -The equilibrium level of GDP = (Y) in the above economy is:

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Actual investment is $62 billion at an equilibrium output level of $620 billion in a private closed economy. The average propensity to save at this level of output:

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Suppose the multiplier is 4 and lump-sum taxes are increased by $16 in a closed economy. We can predict that:

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Other things equal, if $100 billion of government purchases (G) is added to private spending (C + Ig + Xn), GDP will:

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In the aggregate expenditures model, equilibrium GDP in a private closed economy is indicated by:

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  -The equilibrium level of GDP in the above open economy: -The equilibrium level of GDP in the above open economy:

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Exports are added to, and imports are subtracted from, aggregate expenditures in moving from a closed to an open economy.

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In a mixed open economy the equilibrium level of GDP is determined at that point where:

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  -Refer to the above table. If an additional lump-sum tax of $20 were imposed, we would expect: -Refer to the above table. If an additional lump-sum tax of $20 were imposed, we would expect:

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An exchange rate:

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What will be the effect of an excess of planned investment over saving in a private closed economy with unemployed resources?

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

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  -Refer to the above diagram for a private closed economy. The equilibrium level of GDP is: -Refer to the above diagram for a private closed economy. The equilibrium level of GDP is:

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If a nation imposes tariffs and quotas on foreign products, the immediate effect, if no retaliation is immediately imposed by other countries will be to:

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The Sa + M + T schedule has a negative slope.

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At the $180 billion equilibrium level of income, saving is $38 billion in a private closed economy. Planned investment must be:

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