Question 1

If consumption is $13,000 when income is $12,000, and consumption increases to $15,000 when income increases to $15,000, the MPS is

Accepted Answer

A)  -0.15. 
B)  0. 
C)  0.33. 
D)  0.40. 
A)  -0.15. 
B)  0. 
C)  0.33. 
D)  0.40.

Question 2

Refer to the information provided in Table 8.4 below to answer the questions that follow.
Table 8.4  
-Refer to Table 8.4. Assuming society's MPC is constant, at an aggregate income of $1,000 aggregate saving would be

Accepted Answer

A)  $50. 
B)  $150. 
C)  $225. 
D)  $425. 
A)  $50. 
B)  $150. 
C)  $225. 
D)  $425.

Question 3

Refer to the information provided in Figure 8.10 below to answer the questions that follow.   Figure 8.10
-Refer to Figure 8.10. What is the equation for the aggregate expenditure function (AE)?

Accepted Answer

A)  AE = 600 + 0.1Y. 
B)  AE = 200 + 0.8Y. 
C)  AE = 550 + 0.8Y. 
D)  AE = 100 + 0.9Y. 
A)  AE = 600 + 0.1Y. 
B)  AE = 200 + 0.8Y. 
C)  AE = 550 + 0.8Y. 
D)  AE = 100 + 0.9Y.

Question 4

Refer to the information provided in Figure 8.11 below to answer the questions that follow.   Figure 8.11
-Refer to Figure 8.11. The equation for the aggregate expenditure function AE0 is

Accepted Answer

A)  AE0 = 50 + 0.6Y. 
B)  AE0 = 80 + 0.6Y. 
C)  AE0 = 50 + 0.75Y. 
D)  AE0 = 50 + 0.4Y. 
A)  AE0 = 50 + 0.6Y. 
B)  AE0 = 80 + 0.6Y. 
C)  AE0 = 50 + 0.75Y. 
D)  AE0 = 50 + 0.4Y.

Question 5

If S = -200 + 0.2Y and I = 100, then the equilibrium level of income is

Accepted Answer

A)  1,200. 
B)  1,500. 
C)  3,000. 
D)  4,000. 
A)  1,200. 
B)  1,500. 
C)  3,000. 
D)  4,000.

Question 6

Refer to the information provided in Table 8.10 below to answer the questions that follow.
Table 8.10  
-Refer to Table 8.10. Which of the following statements is false?

Accepted Answer

A)  At an output level $2,000, there is a $200 million unplanned inventory decrease. 
B)  If aggregate output equals $2,000 million, then aggregate saving equals $700 million. 
C)  The MPC for this economy is 0.75. 
D)  At an output level of $3,600 million, there is a $200 million unplanned inventory increase. 
A)  At an output level $2,000, there is a $200 million unplanned inventory decrease. 
B)  If aggregate output equals $2,000 million, then aggregate saving equals $700 million. 
C)  The MPC for this economy is 0.75. 
D)  At an output level of $3,600 million, there is a $200 million unplanned inventory increase.

Question 7

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 8

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 $800, aggregate saving is

Accepted Answer

A)  -$100. 
B)  -$20. 
C)  $20. 
D)  $40. 
A)  -$100. 
B)  -$20. 
C)  $20. 
D)  $40.

Question 9

Suppose saving is $1,000 when income is $10,000 and the MPC equals 0.9. When income increases to $15,000, saving is

Accepted Answer

A)  $1,500. 
B)  $1,400. 
C)  $900. 
D)  $500. 
A)  $1,500. 
B)  $1,400. 
C)  $900. 
D)  $500.

Question 10

Keynes used the phrase animal spirits to describe the feelings of entrepreneurs, and he argued that these feelings affect investment decisions.

Accepted Answer

A) True 
 B)False

Question 11

Refer to the information provided in Table 8.7 below to answer the questions that follow.
Table 8.7  
-Refer to Table 8.7. 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 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. At income level $1,500, this household's saving is ________ than (to) zero and this household's consumption is ________ zero.

Accepted Answer

A)  less than; greater than 
B)  equal to ; equal to 
C)  greater than; less than 
D)  greater than; greater than 
A)  less than; greater than 
B)  equal to ; equal to 
C)  greater than; less than 
D)  greater than; greater than

Question 13

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 MPS is

Accepted Answer

A)  0.05. 
B)  0.10. 
C)  0.20. 
D)  0.95. 
A)  0.05. 
B)  0.10. 
C)  0.20. 
D)  0.95.

Question 14

Assume there is no government or foreign sector. If the multiplier is 4, a $20 billion increase in investment will cause aggregate output to increase by

Accepted Answer

A)  $5 billion. 
B)  $20 billion. 
C)  $40 billion. 
D)  $80 billion. 
A)  $5 billion. 
B)  $20 billion. 
C)  $40 billion. 
D)  $80 billion.

Question 15

Refer to the information provided in Table 8.2 below to answer the questions that follow.
Table 8.2  
-Refer to Table 8.2. Assuming society's MPC is constant, at an aggregate income of $1,200 aggregate saving would be

Accepted Answer

A)  $0. 
B)  $20. 
C)  $55. 
D)  $150. 
A)  $0. 
B)  $20. 
C)  $55. 
D)  $150.

Question 16

If consumption is $30,000 when income is $35,000, and consumption increases to $36,000 when income increases to $43,000, the MPC is

Accepted Answer

A)  0.65. 
B)  0.75. 
C)  0.80. 
D)  0.95. 
A)  0.65. 
B)  0.75. 
C)  0.80. 
D)  0.95.

Question 17

Refer to the information provided in Figure 8.11 below to answer the questions that follow.   Figure 8.11
-Refer to Figure 8.11. The value of the multiplier is

Accepted Answer

A)  2. 
B)  2.5. 
C)  3. 
D)  4. 
A)  2. 
B)  2.5. 
C)  3. 
D)  4.

Question 18

Refer to the information provided in Figure 8.4 below to answer the questions that follow.   Figure 8.4
-Refer to Figure 8.4. The aggregate consumption functions C1 and C2

Accepted Answer

A)  have the same MPC values. 
B)  imply different MPS values. 
C)  have the same autonomous consumption values. 
D)  have the same break-even values. 
A)  have the same MPC values. 
B)  imply different MPS values. 
C)  have the same autonomous consumption values. 
D)  have the same break-even values.

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. If MPC increases to 0.8, equilibrium aggregate output

Accepted Answer

A)  increases to $250 million. 
B)  remains at $200 million. 
C)  increases to $400 million. 
D)  cannot be determined from the given information. 
A)  increases to $250 million. 
B)  remains at $200 million. 
C)  increases to $400 million. 
D)  cannot be determined from the given information.

Question 20

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 $800 billion, aggregate saving

Accepted Answer

A)  equals -$50 billion. 
B)  equals $0. 
C)  equals $50 billion. 
D)  cannot be determined from this information. 
A)  equals -$50 billion. 
B)  equals $0. 
C)  equals $50 billion. 
D)  cannot be determined from this information.

Exam 8: Aggregate Expenditure and Equilibrium Output

If consumption is $13,000 when income is $12,000, and consumption increases to $15,000 when income increases to $15,000, the MPS 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. Assuming society's MPC is constant, at an aggregate income of $1,000 aggregate saving would be

Refer to the information provided in Figure 8.10 below to answer the questions that follow. Figure 8.10 -Refer to Figure 8.10. What is the equation for the aggregate expenditure function (AE)?

Refer to the information provided in Figure 8.11 below to answer the questions that follow. Figure 8.11 -Refer to Figure 8.11. The equation for the aggregate expenditure function AE0 is

If S = -200 + 0.2Y and I = 100, then the equilibrium level of income is

Refer to the information provided in Table 8.10 below to answer the questions that follow. Table 8.10 -Refer to Table 8.10. Which of the following statements is false?

If aggregate output equals planned aggregate expenditure, then

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 $800, aggregate saving is

Suppose saving is $1,000 when income is $10,000 and the MPC equals 0.9. When income increases to $15,000, saving is

Keynes used the phrase animal spirits to describe the feelings of entrepreneurs, and he argued that these feelings affect investment decisions.

Refer to the information provided in Table 8.7 below to answer the questions that follow. Table 8.7 -Refer to Table 8.7. The equilibrium level of aggregate output equals

Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1 -Refer to Figure 8.1. At income level $1,500, this household's saving is ________ than (to) zero and this household's consumption is ________ zero.

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 MPS is

Assume there is no government or foreign sector. If the multiplier is 4, a $20 billion increase in investment will cause aggregate output to increase by

Refer to the information provided in Table 8.2 below to answer the questions that follow. Table 8.2 -Refer to Table 8.2. Assuming society's MPC is constant, at an aggregate income of $1,200 aggregate saving would be

If consumption is $30,000 when income is $35,000, and consumption increases to $36,000 when income increases to $43,000, the MPC is

Refer to the information provided in Figure 8.11 below to answer the questions that follow. Figure 8.11 -Refer to Figure 8.11. The value of the multiplier 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. The aggregate consumption functions C1 and C2

Refer to the information provided in Figure 8.11 below to answer the questions that follow. Figure 8.11 -Refer to Figure 8.11. If MPC increases to 0.8, equilibrium aggregate output

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 $800 billion, aggregate saving

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 8.11 below to answer the questions that follow. Figure 8.11 -Refer to Figure 8.11. The equation for the aggregate expenditure function AE₀ 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. At income level $1,500, this household's saving is than (to) zero and this household's consumption is zero.

Refer to the information provided in Figure 8.4 below to answer the questions that follow. Figure 8.4 -Refer to Figure 8.4. The aggregate consumption functions C₁ and C₂