Question 1

Aggregate output will increase if there is a(n)

Accepted Answer

A) increase in saving. 
B) unplanned rise in inventories. 
C) unplanned fall in inventories. 
D) decrease in consumption. 
A) increase in saving. 
B) unplanned rise in inventories. 
C) unplanned fall in inventories. 
D) decrease in consumption.

Question 2

Refer to the information provided in Figure 8.1 below to answer the questions that follow.   Figure 8.1
-Refer to Figure 8.1.An increase in the amount of consumption this household makes when this household's income is zero

Accepted Answer

A) makes the consumption function steeper. 
B) makes the saving function flatter. 
C) shifts the consumption function downward. 
D) shifts the saving function downward. 
A) makes the consumption function steeper. 
B) makes the saving function flatter. 
C) shifts the consumption function downward. 
D) shifts the saving function downward.

Question 3

Related to the Economics in Practice on p.472: The paradox of thrift is that all people deciding to save more could lead to them saving less.

Accepted Answer

A) True 
 B)False

Question 4

The Tiny Tots Toy Company manufactures only sleds.In 2012 Tiny Tots manufactured 10,000 sleds,but sold only 8,000 sleds.In 2012 Tiny Tots' change in inventory was

Accepted Answer

A) -2,000 sleds. 
B) 1,000 sleds. 
C) 2,000 sleds. 
D) 3,000 sleds. 
A) -2,000 sleds. 
B) 1,000 sleds. 
C) 2,000 sleds. 
D) 3,000 sleds.

Question 5

The MPS is

Accepted Answer

A) the change in saving divided by the change in income. 
B) 1 + MPC. 
C) income divided by saving. 
D) total saving divided by total income. 
A) the change in saving divided by the change in income. 
B) 1 + MPC. 
C) income divided by saving. 
D) total saving divided by total income.

Question 6

If the MPS is 0.60,MPC

Accepted Answer

A) is 1.60. 
B) is 0.40. 
C) is 0.30. 
D) cannot be determined by the given information. 
A) is 1.60. 
B) is 0.40. 
C) is 0.30. 
D) cannot be determined by the given information.

Question 7

Refer to the information provided in Table 8.2 below to answer the questions that follow.
Table 8.2  
-Refer to Table 8.2.Society's MPS is

Accepted Answer

A) 0.1. 
B) 0.2. 
C) 0.3. 
D) 0.9. 
A) 0.1. 
B) 0.2. 
C) 0.3. 
D) 0.9.

Question 8

If planned investment is perfectly unresponsive to changes in the interest rate,the planned investment schedule

Accepted Answer

A) has a negative slope. 
B) is horizontal. 
C) is vertical. 
D) has a positive slope. 
A) has a negative slope. 
B) is horizontal. 
C) is vertical. 
D) has a positive slope.

Question 9

Refer to the information provided in Figure 8.2 below to answer the questions that follow.   Figure 8.2
-Refer to Figure 8.2.Jerry's consumption equals his income at Point

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 10

Using the saving/investment approach to equilibrium,the equilibrium condition can be written as

Accepted Answer

A) C + I = C + S. 
B) C = S + I. 
C) C - S = I. 
D) C + S = I. 
A) C + I = C + S. 
B) C = S + I. 
C) C - S = I. 
D) C + S = I.

Question 11

Refer to the information provided in Figure 8.5 below to answer the questions that follow.   Figure 8.5
-Refer to Figure 8.5.If aggregate income is $900 billion,aggregate consumption

Accepted Answer

A) is $25 billion. 
B) is $800 billion. 
C) is $875 billion. 
D) cannot be determined from this information. 
A) is $25 billion. 
B) is $800 billion. 
C) is $875 billion. 
D) cannot be determined from this information.

Question 12

Refer to the information provided in Figure 8.1 below to answer the questions that follow.   Figure 8.1
-Refer to Figure 8.1.This household saves -$300 at an income level of

Accepted Answer

A) $400. 
B) $300 
C) $250. 
D) $125. 
A) $400. 
B) $300 
C) $250. 
D) $125.

Question 13

Refer to the information provided in Figure 8.10 below to answer the questions that follow.   Figure 8.10
-Refer to Figure 8.10.At an aggregate output level of $500 million,there is a

Accepted Answer

A) $100 million unplanned increase in inventories. 
B) $175 million unplanned decrease in inventories. 
C) $0 change in unplanned inventories. 
D) $100 million unplanned decrease in inventories. 
A) $100 million unplanned increase in inventories. 
B) $175 million unplanned decrease in inventories. 
C) $0 change in unplanned inventories. 
D) $100 million unplanned decrease in inventories.

Question 14

Refer to the information provided in Table 8.1 below to answer the questions that follow.
Table 8.1  
-Refer to Table 8.1.Society's MPC is

Accepted Answer

A) 0.95. 
B) 0.90. 
C) 0.80. 
D) 0.05. 
A) 0.95. 
B) 0.90. 
C) 0.80. 
D) 0.05.

Question 15

Refer to the information provided in Figure 8.3 below to answer the questions that follow.   Figure 8.3
-Refer to Figure 8.3.The equation for the aggregate saving function is

Accepted Answer

A) S = -60 + 0.3Y. 
B) S = -200 + 0.6Y. 
C) S = -140 + 0.5Y. 
D) S = -80 + 0.4Y 
A) S = -60 + 0.3Y. 
B) S = -200 + 0.6Y. 
C) S = -140 + 0.5Y. 
D) S = -80 + 0.4Y

Question 16

If you earn additional $500 in disposable income one week for painting your neighbors house,

Accepted Answer

A) the total of your consumption and saving will increase by more than $500. 
B) the total of your consumption and saving will increase by $500. 
C) the total of your consumption and saving will increase by less than $500. 
D) your consumption will increase by more than $500,even if your MPS is 0.1. 
A) the total of your consumption and saving will increase by more than $500. 
B) the total of your consumption and saving will increase by $500. 
C) the total of your consumption and saving will increase by less than $500. 
D) your consumption will increase by more than $500,even if your MPS is 0.1.

Question 17

The economy can be in equilibrium if,and only if,

Accepted Answer

A) planned investment is zero. 
B) actual investment is zero. 
C) planned investment is greater than actual investment. 
D) planned investment equals actual investment. 
A) planned investment is zero. 
B) actual investment is zero. 
C) planned investment is greater than actual investment. 
D) planned investment equals actual investment.

Question 18

When the economy is in equilibrium,savings equals planned investment.

Accepted Answer

A) True 
 B)False

Question 19

Refer to the information provided in Figure 8.3 below to answer the questions that follow.   Figure 8.3
-Refer to Figure 8.3.If aggregate income is $1,000 billion,then in this society aggregate saving is ________ billion.

Accepted Answer

A) $240 
B) $300 
C) $320 
D) $550 
A) $240 
B) $300 
C) $320 
D) $550

Question 20

Refer to the information provided in Figure 8.9 below to answer the questions that follow.   Figure 8.9
-Refer to Figure 8.9.Equilibrium output equals

Accepted Answer

A) 100. 
B) 150. 
C) 200. 
D) 300. 
A) 100. 
B) 150. 
C) 200. 
D) 300.

Exam 8: Aggregate Expenditure and Equilibrium Output

Aggregate output will increase if there is a(n)

Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1 -Refer to Figure 8.1.An increase in the amount of consumption this household makes when this household's income is zero

Related to the Economics in Practice on p.472: The paradox of thrift is that all people deciding to save more could lead to them saving less.

The Tiny Tots Toy Company manufactures only sleds.In 2012 Tiny Tots manufactured 10,000 sleds,but sold only 8,000 sleds.In 2012 Tiny Tots' change in inventory was

The MPS is

If the MPS is 0.60,MPC

Refer to the information provided in Table 8.2 below to answer the questions that follow. Table 8.2 -Refer to Table 8.2.Society's MPS is

If planned investment is perfectly unresponsive to changes in the interest rate,the planned investment schedule

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2.Jerry's consumption equals his income at Point

Using the saving/investment approach to equilibrium,the equilibrium condition can be written as

Refer to the information provided in Figure 8.5 below to answer the questions that follow. Figure 8.5 -Refer to Figure 8.5.If aggregate income is $900 billion,aggregate consumption

Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1 -Refer to Figure 8.1.This household saves -$300 at an income level of

Refer to the information provided in Figure 8.10 below to answer the questions that follow. Figure 8.10 -Refer to Figure 8.10.At an aggregate output level of $500 million,there is a

Refer to the information provided in Table 8.1 below to answer the questions that follow. Table 8.1 -Refer to Table 8.1.Society's MPC is

Refer to the information provided in Figure 8.3 below to answer the questions that follow. Figure 8.3 -Refer to Figure 8.3.The equation for the aggregate saving function is

If you earn additional $500 in disposable income one week for painting your neighbors house,

The economy can be in equilibrium if,and only if,

When the economy is in equilibrium,savings equals planned investment.

Refer to the information provided in Figure 8.3 below to answer the questions that follow. Figure 8.3 -Refer to Figure 8.3.If aggregate income is $1,000 billion,then in this society aggregate saving is ________ billion.

Refer to the information provided in Figure 8.9 below to answer the questions that follow. Figure 8.9 -Refer to Figure 8.9.Equilibrium output equals

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, inflation, and Long-Run Growth

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade,comparative Advantage,and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

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