Question 1

If aggregate output equals planned aggregate expenditure,then

Accepted Answer

A) unplanned inventory investment is zero. 
B) unplanned inventory adjustment is negative. 
C) unplanned inventory adjustment is positive. 
D) actual investment is greater than planned investment. 
A) unplanned inventory investment is zero. 
B) unplanned inventory adjustment is negative. 
C) unplanned inventory adjustment is positive. 
D) actual investment is greater than planned investment.

Question 2

Refer to the information provided in Figure 8.8 below to answer the questions that follow.   Figure 8.8
-Refer to Figure 8.8.The amount of planned investment increases if the interest rate

Accepted Answer

A) drops from 8% to 4%. 
B) rises from 4% to 8%. 
C) remains at 8%. 
D) remains at 4%. 
A) drops from 8% to 4%. 
B) rises from 4% to 8%. 
C) remains at 8%. 
D) remains at 4%.

Question 3

In practice,the actual size of the multiplier is about

Accepted Answer

A) 1. 
B) 1.4. 
C) 2. 
D) 4. 
A) 1. 
B) 1.4. 
C) 2. 
D) 4.

Question 4

If Logan received a $2,500 bonus and his MPS is 0.20,his consumption rises by $________ and his saving rises by $________.

Accepted Answer

A) 500;100 
B) 2,500;200 
C) 2,000;500 
D) 2,500;20 
A) 500;100 
B) 2,500;200 
C) 2,000;500 
D) 2,500;20

Question 5

Refer to the information provided in Figure 8.12 below to answer the questions that follow.   Figure 8.12
-Refer to Figure 8.12.What is the equation for aggregate expenditure AE1?

Accepted Answer

A) AE1 = 1,000 + 0.5Y. 
B) AE1 = 600 + 0.4Y. 
C) AE1 = 1,000 + 0.6Y. 
D) AE1 = 400 + 0.4Y. 
A) AE1 = 1,000 + 0.5Y. 
B) AE1 = 600 + 0.4Y. 
C) AE1 = 1,000 + 0.6Y. 
D) AE1 = 400 + 0.4Y.

Question 6

Refer to the information provided in Figure 8.2 below to answer the questions that follow.   Figure 8.2
-Refer to Figure 8.2.An increase in Jerry's income is represented by

Accepted Answer

A) an upward shift in Jerry's consumption function. 
B) an increase in the slope of Jerry's consumption function. 
C) a movement from Point B to A. 
D) none of the above 
A) an upward shift in Jerry's consumption function. 
B) an increase in the slope of Jerry's consumption function. 
C) a movement from Point B to A. 
D) none of the above

Question 7

If Wanda's income is reduced to zero after she loses her job,her consumption will be ________ and her saving will be ________.

Accepted Answer

A) less than zero;less than zero 
B) greater than zero;greater than zero 
C) less than zero;greater than zero 
D) greater than zero;less than zero 
A) less than zero;less than zero 
B) greater than zero;greater than zero 
C) less than zero;greater than zero 
D) greater than zero;less than zero

Question 8

Refer to the information provided in Table 8.2 below to answer the questions that follow.
Table 8.2  
-Refer to Table 8.2.The equation for the aggregate saving function is

Accepted Answer

A) S = -100 + 0.15Y. 
B) S = -100 + 0.1Y. 
C) S = -150 + 0.2Y. 
D) S = -150 + 0.85Y. 
A) S = -100 + 0.15Y. 
B) S = -100 + 0.1Y. 
C) S = -150 + 0.2Y. 
D) S = -150 + 0.85Y.

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.Positive saving occurs along the line segment

Accepted Answer

A) BC. 
B) DC. 
C) AC. 
D) BA. 
A) BC. 
B) DC. 
C) AC. 
D) BA.

Question 10

Refer to the information provided in Table 8.5 below to answer the questions that follow.
Table 8.5  
-Refer to Table 8.5.The equilibrium level of aggregate output equals

Accepted Answer

A) $3,000 million. 
B) $4,000 million. 
C) $5,000 million. 
D) $6,000 million. 
A) $3,000 million. 
B) $4,000 million. 
C) $5,000 million. 
D) $6,000 million.

Question 11

Higher interest rates are likely to

Accepted Answer

A) have no effect on consumer spending or saving. 
B) decrease consumer spending and increase consumer saving. 
C) decrease both consumer spending and consumer saving. 
D) increase consumer spending and decrease consumer saving. 
A) have no effect on consumer spending or saving. 
B) decrease consumer spending and increase consumer saving. 
C) decrease both consumer spending and consumer saving. 
D) increase consumer spending and decrease consumer saving.

Question 12

Refer to the information provided in Figure 8.4 below to answer the questions that follow.   Figure 8.4
-Refer to Figure 8.4.If income is Y2

Accepted Answer

A) the society's saving is negative along C1,C2,and C3. 
B) the society's consumption is equal along C2 and C3. 
C) the society's saving is positive along C2 and C3. 
D) the society's savings is negative along C1. 
A) the society's saving is negative along C1,C2,and C3. 
B) the society's consumption is equal along C2 and C3. 
C) the society's saving is positive along C2 and C3. 
D) the society's savings is negative along C1.

Question 13

Suppose consumption is $60,000 when income is $90,000 and the MPS equals 0.25.When income increases to $100,000,consumption is

Accepted Answer

A) $90,250. 
B) $85,000. 
C) $70,000. 
D) $67,500. 
A) $90,250. 
B) $85,000. 
C) $70,000. 
D) $67,500.

Question 14

An increase in the MPC,reduces the multiplier.

Accepted Answer

A) True 
 B)False

Question 15

As the MPS decreases,the multiplier will

Accepted Answer

A) increase. 
B) decrease. 
C) remain constant. 
D) either increase or decrease depending on the size of the change in investment. 
A) increase. 
B) decrease. 
C) remain constant. 
D) either increase or decrease depending on the size of the change in investment.

Question 16

If C = 500 + 0.9Y and I = 400,then the equilibrium level of income is

Accepted Answer

A) 900. 
B) 1,000. 
C) 1,800. 
D) 9,000. 
A) 900. 
B) 1,000. 
C) 1,800. 
D) 9,000.

Question 17

Refer to the information provided in Table 8.5 below to answer the questions that follow.
Table 8.5  
-Refer to Table 8.5.The MPC in this economy is

Accepted Answer

A) 0.5. 
B) 0.6. 
C) 0.7. 
D) 0.8. 
A) 0.5. 
B) 0.6. 
C) 0.7. 
D) 0.8.

Question 18

Refer to the information provided in Table 8.4 below to answer the questions that follow.
Table 8.4  
-Refer to Table 8.4.The equilibrium level of aggregate output equals

Accepted Answer

A) $400 billion. 
B) $600 billion. 
C) $800 billion. 
D) $1,000 billion. 
A) $400 billion. 
B) $600 billion. 
C) $800 billion. 
D) $1,000 billion.

Question 19

Refer to the information provided in Figure 8.11 below to answer the questions that follow.   Figure 8.11
-Refer to Figure 8.11.A $20 million decrease in autonomous consumption

Accepted Answer

A) changes equilibrium expenditure to $120 million. 
B) changes equilibrium output to $180 million. 
C) will change the MPC. 
D) will change the MPS. 
A) changes equilibrium expenditure to $120 million. 
B) changes equilibrium output to $180 million. 
C) will change the MPC. 
D) will change the MPS.

Question 20

If the MPS is 0.1,then the multiplier is 10.

Accepted Answer

A) True 
 B)False

Exam 8: Aggregate Expenditure and Equilibrium Output

If aggregate output equals planned aggregate expenditure,then

Refer to the information provided in Figure 8.8 below to answer the questions that follow. Figure 8.8 -Refer to Figure 8.8.The amount of planned investment increases if the interest rate

In practice,the actual size of the multiplier is about

If Logan received a $2,500 bonus and his MPS is 0.20,his consumption rises by $________ and his saving rises by $________.

Refer to the information provided in Figure 8.12 below to answer the questions that follow. Figure 8.12 -Refer to Figure 8.12.What is the equation for aggregate expenditure AE1?

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2.An increase in Jerry's income is represented by

If Wanda's income is reduced to zero after she loses her job,her consumption will be ________ and her saving will be ________.

Refer to the information provided in Table 8.2 below to answer the questions that follow. Table 8.2 -Refer to Table 8.2.The equation for the aggregate saving function is

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2.Positive saving occurs along the line segment

Refer to the information provided in Table 8.5 below to answer the questions that follow. Table 8.5 -Refer to Table 8.5.The equilibrium level of aggregate output equals

Higher interest rates are likely to

Refer to the information provided in Figure 8.4 below to answer the questions that follow. Figure 8.4 -Refer to Figure 8.4.If income is Y2

Suppose consumption is $60,000 when income is $90,000 and the MPS equals 0.25.When income increases to $100,000,consumption is

An increase in the MPC,reduces the multiplier.

As the MPS decreases,the multiplier will

If C = 500 + 0.9Y and I = 400,then the equilibrium level of income is

Refer to the information provided in Table 8.5 below to answer the questions that follow. Table 8.5 -Refer to Table 8.5.The MPC in this economy is

Refer to the information provided in Table 8.4 below to answer the questions that follow. Table 8.4 -Refer to Table 8.4.The equilibrium level of aggregate output equals

Refer to the information provided in Figure 8.11 below to answer the questions that follow. Figure 8.11 -Refer to Figure 8.11.A $20 million decrease in autonomous consumption

If the MPS is 0.1,then the multiplier is 10.

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

Filters

If Logan received a $2,500 bonus and his MPS is 0.20,his consumption rises by $ and his saving rises by $.

If Wanda's income is reduced to zero after she loses her job,her consumption will be and her saving will be .