Question 1

Investment spending increases during ________,and decreases during ________.

Accepted Answer

A) an expansion;a recession 
B) a recession;an expansion 
C) a recession;a depression 
D) a deflation;an inflation 
A) an expansion;a recession 
B) a recession;an expansion 
C) a recession;a depression 
D) a deflation;an inflation

Question 2

At macroeconomic equilibrium,total ________ equals total ________.

Accepted Answer

A) spending;production 
B) investment;inventories 
C) consumption;production 
D) taxes;transfers 
A) spending;production 
B) investment;inventories 
C) consumption;production 
D) taxes;transfers

Question 3

What is the formula for the multiplier? Explain why this formula is considered to be too simple.

Accepted Answer

Multiplier = @#IMG-DLM& The formula ignores the ef

Question 4

A stock market boom which causes stock prices to rise should cause

Accepted Answer

A) a decrease in consumption spending. 
B) an increase in consumption spending. 
C) a decrease in wealth. 
D) a decrease in net export spending. 
A) a decrease in consumption spending. 
B) an increase in consumption spending. 
C) a decrease in wealth. 
D) a decrease in net export spending.

Question 5

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

Accepted Answer

A) 4. 
B) 0.75. 
C) 0.5. 
D) 0.25. 
A) 4. 
B) 0.75. 
C) 0.5. 
D) 0.25.

Question 6

Which of the following leads to an increase in real GDP?

Accepted Answer

A) a decrease in government spending 
B) a decrease in the inflation rate in other countries relative to the inflation rate in the United States 
C) a decrease in interest rates 
D) Households have increasingly pessimistic expectations about future income. 
A) a decrease in government spending 
B) a decrease in the inflation rate in other countries relative to the inflation rate in the United States 
C) a decrease in interest rates 
D) Households have increasingly pessimistic expectations about future income.

Question 7

________ is defined as the value of a household's assets minus the value of its liabilities.

Accepted Answer

A) Household income 
B) Household wealth 
C) Personal household consumption 
D) Planned household investment 
A) Household income 
B) Household wealth 
C) Personal household consumption 
D) Planned household investment

Question 8

If disposable income falls by $40 billion and consumption falls by $30 billion,then the slope of the consumption function is

Accepted Answer

A) 1.33. 
B) 0.75. 
C) 0.4. 
D) 0.3. 
A) 1.33. 
B) 0.75. 
C) 0.4. 
D) 0.3.

Question 9

________ in taxes will decrease consumption spending,and ________ in transfer payments will increase consumption spending.

Accepted Answer

A) An increase;an increase 
B) A decrease;an increase 
C) An increase;a decrease 
D) A decrease;a decrease 
A) An increase;an increase 
B) A decrease;an increase 
C) An increase;a decrease 
D) A decrease;a decrease

Question 10

When aggregate expenditure is more than GDP,which of the following is true?

Accepted Answer

A) There was an unplanned decrease in inventories. 
B) Firms spent less on capital goods than they planned. 
C) Households bought fewer new homes than they planned. 
D) All of the above must be true when aggregate expenditure is more than GDP. 
A) There was an unplanned decrease in inventories. 
B) Firms spent less on capital goods than they planned. 
C) Households bought fewer new homes than they planned. 
D) All of the above must be true when aggregate expenditure is more than GDP.

Question 11

When net exports equal zero,the economy is in macroeconomic equilibrium.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a component of aggregate expenditure?

Accepted Answer

A) consumption spending 
B) planned investment spending 
C) actual investment spending 
D) government spending 
A) consumption spending 
B) planned investment spending 
C) actual investment spending 
D) government spending

Question 13

If disposable income falls by $50 billion and consumption falls by $40 billion,then the slope of the consumption function is

Accepted Answer

A) 1.20. 
B) 0.80. 
C) 0.70. 
D) 0.10. 
A) 1.20. 
B) 0.80. 
C) 0.70. 
D) 0.10.

Question 14

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China ________ U.S.firms is ________ the value of assembling the iPhones in Chinese factories.

Accepted Answer

A) exports to;equal to 
B) exports to;greater than 
C) imports from;less than 
D) imports from;greater than 
A) exports to;equal to 
B) exports to;greater than 
C) imports from;less than 
D) imports from;greater than

Question 15

If aggregate expenditure is greater than GDP,how will the economy reach macroeconomic equilibrium?

Accepted Answer

A) Inventories will decline,and GDP and employment will decline. 
B) Inventories will rise,and GDP and employment will decline. 
C) Inventories will decline,and GDP and employment will rise. 
D) Inventories will rise,and GDP and employment will rise. 
A) Inventories will decline,and GDP and employment will decline. 
B) Inventories will rise,and GDP and employment will decline. 
C) Inventories will decline,and GDP and employment will rise. 
D) Inventories will rise,and GDP and employment will rise.

Question 16

MPC + MPS =

Accepted Answer

A) 0. 
B) 0.5. 
C) 1. 
D) 100. 
A) 0. 
B) 0.5. 
C) 1. 
D) 100.

Question 17

What is the difference between aggregate expenditure and consumption spending?

Accepted Answer

Aggregate expenditure represents the tot

Question 18

If the multiplier is 5,the marginal propensity to consume must be 0.8.

Accepted Answer

A) True 
 B)False

Question 19

An increase in Social Security payments will

Accepted Answer

A) increase consumption spending. 
B) increase investment spending. 
C) increase government spending. 
D) increase export spending. 
A) increase consumption spending. 
B) increase investment spending. 
C) increase government spending. 
D) increase export spending.

Question 20

If disposable income increases by $500 million,and consumption increases by $400 million,then the marginal propensity to consume is

Accepted Answer

A) 1.25. 
B) 0.8. 
C) 0.6. 
D) 0.4. 
A) 1.25. 
B) 0.8. 
C) 0.6. 
D) 0.4.

Investment spending increases during ,and decreases during .

At macroeconomic equilibrium,total equals total .

What is the formula for the multiplier? Explain why this formula is considered to be too simple.

A stock market boom which causes stock prices to rise should cause

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

Which of the following leads to an increase in real GDP?

________ is defined as the value of a household's assets minus the value of its liabilities.

If disposable income falls by $40 billion and consumption falls by $30 billion,then the slope of the consumption function is

in taxes will decrease consumption spending,and in transfer payments will increase consumption spending.

When aggregate expenditure is more than GDP,which of the following is true?

When net exports equal zero,the economy is in macroeconomic equilibrium.

Which of the following is not a component of aggregate expenditure?

If disposable income falls by $50 billion and consumption falls by $40 billion,then the slope of the consumption function is

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China U.S.firms is the value of assembling the iPhones in Chinese factories.

If aggregate expenditure is greater than GDP,how will the economy reach macroeconomic equilibrium?

MPC + MPS =

What is the difference between aggregate expenditure and consumption spending?

If the multiplier is 5,the marginal propensity to consume must be 0.8.

An increase in Social Security payments will

If disposable income increases by $500 million,and consumption increases by $400 million,then the marginal propensity to consume is

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 12: Aggregate Expenditure and Output in the Short Run

Investment spending increases during ________,and decreases during ________.

At macroeconomic equilibrium,total ________ equals total ________.

What is the formula for the multiplier? Explain why this formula is considered to be too simple.

A stock market boom which causes stock prices to rise should cause

If national income increases by $20 million and consumption increases by $5 million,the marginal propensity to consume is

Which of the following leads to an increase in real GDP?

________ is defined as the value of a household's assets minus the value of its liabilities.

If disposable income falls by $40 billion and consumption falls by $30 billion,then the slope of the consumption function is

________ in taxes will decrease consumption spending,and ________ in transfer payments will increase consumption spending.

When aggregate expenditure is more than GDP,which of the following is true?

When net exports equal zero,the economy is in macroeconomic equilibrium.

Which of the following is not a component of aggregate expenditure?

If disposable income falls by $50 billion and consumption falls by $40 billion,then the slope of the consumption function is

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China ________ U.S.firms is ________ the value of assembling the iPhones in Chinese factories.

If aggregate expenditure is greater than GDP,how will the economy reach macroeconomic equilibrium?

MPC + MPS =

What is the difference between aggregate expenditure and consumption spending?

If the multiplier is 5,the marginal propensity to consume must be 0.8.

An increase in Social Security payments will

If disposable income increases by $500 million,and consumption increases by $400 million,then the marginal propensity to consume is

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation,unemployment,and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Investment spending increases during ,and decreases during .

At macroeconomic equilibrium,total equals total .

in taxes will decrease consumption spending,and in transfer payments will increase consumption spending.

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China U.S.firms is the value of assembling the iPhones in Chinese factories.