Question 1

A firm's inventory is the orders for goods that have yet to be produced.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the information provided in Figure 8.3 below to answer the questions that follow.   Figure 8.3
-Refer to Figure 8.3. In this economy, aggregate saving will be zero if income is

Accepted Answer

A)  $100 billion. 
B)  $200 billion. 
C)  $300 billion. 
D)  $400 billion. 
A)  $100 billion. 
B)  $200 billion. 
C)  $300 billion. 
D)  $400 billion.

Question 3

At equilibrium, C + S = C + I.

Accepted Answer

A) True 
 B)False

Question 4

If you save $20 when you experience a $80 rise in your income

Accepted Answer

A)  your MPS is 0.4. 
B)  your MPC is 0.75. 
C)  your MPC is 0.8. 
D)  your MPS is 0.8. 
A)  your MPS is 0.4. 
B)  your MPC is 0.75. 
C)  your MPC is 0.8. 
D)  your MPS is 0.8.

Question 5

As interest rates fall, spending decreases.

Accepted Answer

A) True 
 B)False

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. Along the segment AB, Jerry's

Accepted Answer

A)  consumption is less than his income. 
B)  saving is positive. 
C)  consumption equals his income. 
D)  saving is negative. 
A)  consumption is less than his income. 
B)  saving is positive. 
C)  consumption equals his income. 
D)  saving is negative.

Question 7

Assuming there is no government or foreign sector, if the multiplier is 5, the MPC is

Accepted Answer

A)  0.4. 
B)  0.5. 
C)  0.8. 
D)  5. 
A)  0.4. 
B)  0.5. 
C)  0.8. 
D)  5.

Question 8

Refer to the information provided in Figure 8.4 below to answer the questions that follow.   Figure 8.4
-Refer to Figure 8.4. Suppose the consumption function for C1 is [C1 = 20 + 0.75Y]. The consumption function that best fits C2 is

Accepted Answer

A)  C2 = 10 + 0.5Y. 
B)  C2 = 20 + 0.25Y. 
C)  C2 = 10 + 0.4Y. 
D)  C2 = 40 + 0.75Y. 
A)  C2 = 10 + 0.5Y. 
B)  C2 = 20 + 0.25Y. 
C)  C2 = 10 + 0.4Y. 
D)  C2 = 40 + 0.75Y.

Question 9

Assuming there is no government or foreign sector, the economy will be in equilibrium if, and only if, planned investment equals actual investment.

Accepted Answer

A) True 
 B)False

Question 10

Refer to the information provided in Figure 8.3 below to answer the questions that follow.   Figure 8.3
-Refer to Figure 8.3. For this society, aggregate saving is ________ if aggregate income is above $200.

Accepted Answer

A)  negative 
B)  positive 
C)  zero 
D)  equal to aggregate consumption 
A)  negative 
B)  positive 
C)  zero 
D)  equal to aggregate consumption

Question 11

Refer to the information provided in Table 8.8 below to answer the questions that follow.
Table 8.8  
-Refer to Table 8.8. 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 12

Y = C + I even when the economy is not in equilibrium.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the information provided in Table 8.8 below to answer the questions that follow.
Table 8.8  
-Refer to Table 8.8. 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 14

Which of the following is not an investment?

Accepted Answer

A)  the purchase of a new computer system by a law firm 
B)  the purchase of a delivery van by a florist 
C)  the purchase of a share of stock by a household 
D)  all of the above 
A)  the purchase of a new computer system by a law firm 
B)  the purchase of a delivery van by a florist 
C)  the purchase of a share of stock by a household 
D)  all of the above

Question 15

When planned spending exceeds output, there is an unplanned inventory investment.

Accepted Answer

A) True 
 B)False

Question 16

Assuming there is no government or foreign sector, [1 / 1-MPC] represents

Accepted Answer

A)  the multiplier. 
B)  break even income. 
C)  the consumption function. 
D)  the saving function. 
A)  the multiplier. 
B)  break even income. 
C)  the consumption function. 
D)  the saving function.

Question 17

As interest rates rise, spending decreases.

Accepted Answer

A) True 
 B)False

Question 18

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's consumption function is

Accepted Answer

A)  C = 200 + 0.2Y. 
B)  C = 300 + 0.75Y. 
C)  C = 500 + 0.5Y. 
D)  C = 1,000 + 0.2Y. 
A)  C = 200 + 0.2Y. 
B)  C = 300 + 0.75Y. 
C)  C = 500 + 0.5Y. 
D)  C = 1,000 + 0.2Y.

Question 19

Refer to the information provided in Figure 8.6 below to answer the questions that follow.   Figure 8.6
-Refer to Figure 8.6. If aggregate income is $1,000, aggregate consumption is

Accepted Answer

A)  $850. 
B)  $910. 
C)  $920. 
D)  $960. 
A)  $850. 
B)  $910. 
C)  $920. 
D)  $960.

Question 20

Refer to the information provided in Figure 8.1 below to answer the questions that follow.   Figure 8.1
-Refer to Figure 8.1. The equation for this household's saving function is

Accepted Answer

A)  S = -200 + 0.8Y. 
B)  S = -300 + 0.25Y. 
C)  S = -500 + 0.5Y. 
D)  S = -1,000 + 0.8Y. 
A)  S = -200 + 0.8Y. 
B)  S = -300 + 0.25Y. 
C)  S = -500 + 0.5Y. 
D)  S = -1,000 + 0.8Y.

Exam 8: Aggregate Expenditure and Equilibrium Output

A firm's inventory is the orders for goods that have yet to be produced.

Refer to the information provided in Figure 8.3 below to answer the questions that follow. Figure 8.3 -Refer to Figure 8.3. In this economy, aggregate saving will be zero if income is

At equilibrium, C + S = C + I.

If you save $20 when you experience a $80 rise in your income

As interest rates fall, spending decreases.

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. Along the segment AB, Jerry's

Assuming there is no government or foreign sector, if the multiplier is 5, the MPC is

Refer to the information provided in Figure 8.4 below to answer the questions that follow. Figure 8.4 -Refer to Figure 8.4. Suppose the consumption function for C1 is [C1 = 20 + 0.75Y]. The consumption function that best fits C2 is

Assuming there is no government or foreign sector, the economy will be in equilibrium if, and only if, planned investment equals actual 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. For this society, aggregate saving is ________ if aggregate income is above $200.

Refer to the information provided in Table 8.8 below to answer the questions that follow. Table 8.8 -Refer to Table 8.8. The equilibrium level of aggregate output equals

Y = C + I even when the economy is not in equilibrium.

Refer to the information provided in Table 8.8 below to answer the questions that follow. Table 8.8 -Refer to Table 8.8. The MPC in this economy is

Which of the following is not an investment?

When planned spending exceeds output, there is an unplanned inventory investment.

Assuming there is no government or foreign sector, [1 / 1-MPC] represents

As interest rates rise, spending decreases.

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's consumption function is

Refer to the information provided in Figure 8.6 below to answer the questions that follow. Figure 8.6 -Refer to Figure 8.6. If aggregate income is $1,000, aggregate consumption is

Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1 -Refer to Figure 8.1. The equation for this household's saving function is

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

Money, the Federal Reserve, and the Interest Rate

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

Policy Effects and Cost 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 Economies

Critical Thinking About Research

Filters

Refer to the information provided in Figure 8.4 below to answer the questions that follow. Figure 8.4 -Refer to Figure 8.4. Suppose the consumption function for C₁ is [C₁ = 20 + 0.75Y]. The consumption function that best fits C₂ is