Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Refer to the information provided in Figure 8.2 below to answer the questions that follow.   Figure 8.2
-Refer to Figure 8.2. The line segment BD represents Jerry's

Accepted Answer

A)  consumption when income equals Y1. 
B)  saving when income equals zero. 
C)  saving when income is Y1. 
D)  consumption when income equals zero. 
A)  consumption when income equals Y1. 
B)  saving when income equals zero. 
C)  saving when income is Y1. 
D)  consumption when income equals zero.

Question 3

Refer to the information provided in Table 8.3 below to answer the questions that follow.
Table 8.3  
-Refer to Table 8.3. At an aggregate income level of $300, aggregate saving would be

Accepted Answer

A)  -$125. 
B)  $100. 
C)  $125. 
D)  $175. 
A)  -$125. 
B)  $100. 
C)  $125. 
D)  $175.

Question 4

Refer to the information provided in Table 8.7 below to answer the questions that follow.
Table 8.7  
-Refer to Table 8.7. At an aggregate output level of $200 billion, the unplanned inventory change is

Accepted Answer

A)  -$200 billion. 
B)  -$150 billion. 
C)  -$50 billion. 
D)  $100 billion. 
A)  -$200 billion. 
B)  -$150 billion. 
C)  -$50 billion. 
D)  $100 billion.

Question 5

If Inventory investment is lower than firms planned

Accepted Answer

A)  actual and planned investment are equal. 
B)  actual investment is less than planned investment. 
C)  actual investment is greater than planned investment. 
D)  actual investment must be negative. 
A)  actual and planned investment are equal. 
B)  actual investment is less than planned investment. 
C)  actual investment is greater than planned investment. 
D)  actual investment must be negative.

Question 6

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 consumption function is

Accepted Answer

A)  C = 140 + 0.5Y. 
B)  C = 60 + 0.7Y. 
C)  C = 80 + 0.6Y. 
D)  C = 60 + 0.4Y. 
A)  C = 140 + 0.5Y. 
B)  C = 60 + 0.7Y. 
C)  C = 80 + 0.6Y. 
D)  C = 60 + 0.4Y.

Question 7

Assume that in Narnia, planned investment is $80 billion but actual investment is $50 billion. Unplanned inventory investment is

Accepted Answer

A)  -$150 billion. 
B)  -$30 billion. 
C)  $65 billion. 
D)  $150 billion. 
A)  -$150 billion. 
B)  -$30 billion. 
C)  $65 billion. 
D)  $150 billion.

Question 8

Refer to the information provided in Figure 8.10 below to answer the questions that follow.   Figure 8.10
-Refer to Figure 8.10. Unplanned inventories increase and output decreases when aggregate output is

Accepted Answer

A)  $0. 
B)  $500 million. 
C)  $1,000 million. 
D)  > $1,000 million. 
A)  $0. 
B)  $500 million. 
C)  $1,000 million. 
D)  > $1,000 million.

Question 9

Refer to the information provided in Table 8.9 below to answer the questions that follow.
Table 8.9  
-Refer to Table 8.9. At an aggregate output level of $300 billion, the unplanned inventory change is

Accepted Answer

A)  -$40 billion. 
B)  -$10 billion. 
C)  $0. 
D)  $10 billion. 
A)  -$40 billion. 
B)  -$10 billion. 
C)  $0. 
D)  $10 billion.

Question 10

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 = 15 + 0.4Y]. The consumption function that best fits C3 is

Accepted Answer

A)  C3 = 20 + 0.8Y. 
B)  C3 = 30 + 0.25Y. 
C)  C3 = 15 + 0.75Y. 
D)  C3 = 20 + 0.4Y. 
A)  C3 = 20 + 0.8Y. 
B)  C3 = 30 + 0.25Y. 
C)  C3 = 15 + 0.75Y. 
D)  C3 = 20 + 0.4Y.

Question 11

Suppose consumption is $5,000 when income is $8,000 and the MPC equals 0.9. When income increases to $10,000, consumption is

Accepted Answer

A)  $2,700. 
B)  $4,500. 
C)  $6,800. 
D)  $7,200. 
A)  $2,700. 
B)  $4,500. 
C)  $6,800. 
D)  $7,200.

Question 12

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 consumption is the only expenditure in this society, at an income level of $800 billion

Accepted Answer

A)  saving is zero. 
B)  consumption equals income. 
C)  the economy is in equilibrium. 
D)  all of the above 
A)  saving is zero. 
B)  consumption equals income. 
C)  the economy is in equilibrium. 
D)  all of the above

Question 13

If the MPS is 0.25, then the multiplier is 4.

Accepted Answer

A) True 
 B)False

Question 14

Refer to the information provided in Table 8.9 below to answer the questions that follow.
Table 8.9  
-Refer to Table 8.9. At an aggregate output level of $200 billion, planned expenditure equals

Accepted Answer

A)  $160 billion. 
B)  $220 billion. 
C)  $260 billion. 
D)  $410 billion. 
A)  $160 billion. 
B)  $220 billion. 
C)  $260 billion. 
D)  $410 billion.

Question 15

Related to the Economics in Practice on p. 146: Early results from the Save More Tomorrow retirement plans have shown ________ in the savings rates of the enrolled.

Accepted Answer

A)  very little change 
B)  mixed results 
C)  significant decreases 
D)  dramatic increases 
A)  very little change 
B)  mixed results 
C)  significant decreases 
D)  dramatic increases

Question 16

Refer to the information provided in Figure 8.9 below to answer the questions that follow.   Figure 8.9
-Refer to Figure 8.9. There is a $75 million increase in unplanned inventories at an aggregate output level of

Accepted Answer

A)  $100 million. 
B)  $200 million. 
C)  $300 million. 
D)  > $300 million. 
A)  $100 million. 
B)  $200 million. 
C)  $300 million. 
D)  > $300 million.

Question 17

Refer to the information provided in Table 8.9 below to answer the questions that follow.
Table 8.9  
-Refer to Table 8.9. The equilibrium level of aggregate output is

Accepted Answer

A)  $200 billion. 
B)  $300 billion. 
C)  $400 billion. 
D)  $500 billion. 
A)  $200 billion. 
B)  $300 billion. 
C)  $400 billion. 
D)  $500 billion.

Question 18

Related to the Economics in Practice on p. 146: A recent study by economists at Yale University and the University of Chicago suggests that changing retirement plan enrollment options from a(n) ________ system to a(n) ________ system increased pension plan enrollment after three months of work from 65 percent of workers to 98 percent of workers.

Accepted Answer

A)  "opt-in"; "opt-out" 
B)  "opt-out"; "opt-in" 
C)  voluntary; mandatory 
D)  mandatory; voluntary 
A)  "opt-in"; "opt-out" 
B)  "opt-out"; "opt-in" 
C)  voluntary; mandatory 
D)  mandatory; voluntary

Question 19

The change in saving divided by the change in income is equal to

Accepted Answer

A)  the MPC. 
B)  the MPS. 
C)  1 - MPS. 
D)  MPC + MPS. 
A)  the MPC. 
B)  the MPS. 
C)  1 - MPS. 
D)  MPC + MPS.

Question 20

Refer to the information provided in Figure 8.3 below to answer the questions that follow.   Figure 8.3
-Refer to Figure 8.3. [60 + 0.7Y] is this society's

Accepted Answer

A)  MPC. 
B)  MPS. 
C)  saving function. 
D)  consumption function. 
A)  MPC. 
B)  MPS. 
C)  saving function. 
D)  consumption function.

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

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. The line segment BD represents Jerry's

Refer to the information provided in Table 8.3 below to answer the questions that follow. Table 8.3 -Refer to Table 8.3. At an aggregate income level of $300, aggregate saving would be

Refer to the information provided in Table 8.7 below to answer the questions that follow. Table 8.7 -Refer to Table 8.7. At an aggregate output level of $200 billion, the unplanned inventory change is

If Inventory investment is lower than firms planned

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 consumption function is

Assume that in Narnia, planned investment is $80 billion but actual investment is $50 billion. Unplanned inventory investment is

Refer to the information provided in Figure 8.10 below to answer the questions that follow. Figure 8.10 -Refer to Figure 8.10. Unplanned inventories increase and output decreases when aggregate output is

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. At an aggregate output level of $300 billion, the unplanned inventory change 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 = 15 + 0.4Y]. The consumption function that best fits C₃ is

Suppose consumption is $5,000 when income is $8,000 and the MPC equals 0.9. When income increases to $10,000, consumption is

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 consumption is the only expenditure in this society, at an income level of $800 billion

If the MPS is 0.25, then the multiplier is 4.

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. At an aggregate output level of $200 billion, planned expenditure equals

Related to the Economics in Practice on p. 146: Early results from the Save More Tomorrow retirement plans have shown ________ in the savings rates of the enrolled.

Refer to the information provided in Figure 8.9 below to answer the questions that follow. Figure 8.9 -Refer to Figure 8.9. There is a $75 million increase in unplanned inventories at an aggregate output level of

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. The equilibrium level of aggregate output is

The change in saving divided by the change in income is equal to

Refer to the information provided in Figure 8.3 below to answer the questions that follow. Figure 8.3 -Refer to Figure 8.3. [60 + 0.7Y] is this society's

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

Exam 8: Aggregate Expenditure and Equilibrium Output

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

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. The line segment BD represents Jerry's

Refer to the information provided in Table 8.3 below to answer the questions that follow. Table 8.3 -Refer to Table 8.3. At an aggregate income level of $300, aggregate saving would be

Refer to the information provided in Table 8.7 below to answer the questions that follow. Table 8.7 -Refer to Table 8.7. At an aggregate output level of $200 billion, the unplanned inventory change is

If Inventory investment is lower than firms planned

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 consumption function is

Assume that in Narnia, planned investment is $80 billion but actual investment is $50 billion. Unplanned inventory investment is

Refer to the information provided in Figure 8.10 below to answer the questions that follow. Figure 8.10 -Refer to Figure 8.10. Unplanned inventories increase and output decreases when aggregate output is

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. At an aggregate output level of $300 billion, the unplanned inventory change 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 = 15 + 0.4Y]. The consumption function that best fits C3 is

Suppose consumption is $5,000 when income is $8,000 and the MPC equals 0.9. When income increases to $10,000, consumption is

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 consumption is the only expenditure in this society, at an income level of $800 billion

If the MPS is 0.25, then the multiplier is 4.

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. At an aggregate output level of $200 billion, planned expenditure equals

Related to the Economics in Practice on p. 146: Early results from the Save More Tomorrow retirement plans have shown ________ in the savings rates of the enrolled.

Refer to the information provided in Figure 8.9 below to answer the questions that follow. Figure 8.9 -Refer to Figure 8.9. There is a $75 million increase in unplanned inventories at an aggregate output level of

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. The equilibrium level of aggregate output is

The change in saving divided by the change in income is equal to

Refer to the information provided in Figure 8.3 below to answer the questions that follow. Figure 8.3 -Refer to Figure 8.3. [60 + 0.7Y] is this society's

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 = 15 + 0.4Y]. The consumption function that best fits C₃ is