Question 1

Goods that have been produced but not yet sold are referred to as

Accepted Answer

A) understocks. 
B) inventories. 
C) pre-sold goods. 
D) capital goods. 
A) understocks. 
B) inventories. 
C) pre-sold goods. 
D) capital goods.

Question 2

Which of the following is not one of the four main categories of spending identified by John Maynard Keynes?

Accepted Answer

A) consumption 
B) planned investment 
C) government purchases 
D) transfer payments 
A) consumption 
B) planned investment 
C) government purchases 
D) transfer payments

Question 3

Into which category of aggregate expenditure would each of the following transactions fall?
a.Sandra MacMillian purchases a new Ford Focus.
b.The city of Richardson buys 5 new garbage trucks.
c.Adrian Garcia buys a newly constructed townhome.
d.A consumer in Latvia orders an iPhone from Apple.
e.Ford Motor Company buys 300 new iPhones from Apple.

Accepted Answer

a.Consumption
b.Gove

Question 4

During a(n)________ many firms experience reduced profits,which reduces ________ and investment spending.

Accepted Answer

A) expansion;business confidence 
B) recession;cash flow 
C) expansion;cash flow 
D) recession;government spending 
A) expansion;business confidence 
B) recession;cash flow 
C) expansion;cash flow 
D) recession;government spending

Question 5

Equations for C,I,G,and NX are given below.If the equilibrium level of GDP is $32,000,what will the new equilibrium level of GDP be if government spending increases to 2,500? C = 5,000 + (MPC)Y
I = 1,500
G = 2,000
NX = -500

Accepted Answer

A) $32,500 
B) $34,000 
C) $38,000 
D) $42,000 
A) $32,500 
B) $34,000 
C) $38,000 
D) $42,000

Question 6

Economists first began studying the relationship between changes in aggregate expenditures and changes in GDP

Accepted Answer

A) in the 1950s. 
B) during the Great Depression. 
C) at the end of the Civil War. 
D) during the Industrial Revolution. 
A) in the 1950s. 
B) during the Great Depression. 
C) at the end of the Civil War. 
D) during the Industrial Revolution.

Question 7

Figure 12-1  
-Refer to Figure 12-1.If the economy is in equilibrium,it is at a level of aggregate expenditure given by point

Accepted Answer

A) J. 
B) K. 
C) L. 
D) Points J,K and L all represent equilibrium. 
A) J. 
B) K. 
C) L. 
D) Points J,K and L all represent equilibrium.

Question 8

Given the equations for C,I,G,and NX below,what is the marginal propensity to consume? C = 1,000 + 0.8Y
I = 1,500
G = 1,250
NX = 100

Accepted Answer

A) 0.2 
B) 0.8 
C) 1.8 
D) 10 
A) 0.2 
B) 0.8 
C) 1.8 
D) 10

Question 9

Table 12-13
  
-Refer to Table 12-13.Using the table above,answer the following questions.The numbers in the table are in billions of dollars.
a.What is the equilibrium level of real GDP?
b.What is the MPC?
c.If investment spending declines by $50 billion,what will happen to equilibrium GDP?

Accepted Answer

a.Equilibrium real GDP is determined whe

Question 10

Why do economists care about aggregate expenditures?

Accepted Answer

Increases and decreases in aggregate exp

Question 11

Aggregate expenditure includes spending on

Accepted Answer

A) C + I + G. 
B) C + I + G - NX. 
C) C + I + G + NX. 
D) C + I + depreciation - NX. 
A) C + I + G. 
B) C + I + G - NX. 
C) C + I + G + NX. 
D) C + I + depreciation - NX.

Question 12

Macroeconomic equilibrium can occur at any point on the 45-degree line.

Accepted Answer

A) True 
 B)False

Question 13

If firms sell what they expected to sell,which of the following will be true?

Accepted Answer

A) Aggregate expenditure will be greater than GDP. 
B) There is no unplanned change in inventories. 
C) Inventories will rise,and GDP and employment will fall. 
D) Aggregate expenditure will be less than GDP. 
A) Aggregate expenditure will be greater than GDP. 
B) There is no unplanned change in inventories. 
C) Inventories will rise,and GDP and employment will fall. 
D) Aggregate expenditure will be less than GDP.

Question 14

If the consumption function is defined as C = 7,250 + 0.8Y,what is the multiplier?

Accepted Answer

A) 0.2 
B) 0.8 
C) 1.25 
D) 5 
A) 0.2 
B) 0.8 
C) 1.25 
D) 5

Question 15

A decrease in Social Security payments will

Accepted Answer

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

Question 16

Macroeconomic equilibrium occurs when

Accepted Answer

A) aggregate expenditure = GDP. 
B) aggregate expenditure = C+ I + G + net transfers. 
C) aggregate income = planned inventories. 
D) aggregate expenditure = planned inventories. 
A) aggregate expenditure = GDP. 
B) aggregate expenditure = C+ I + G + net transfers. 
C) aggregate income = planned inventories. 
D) aggregate expenditure = planned inventories.

Question 17

The slope of the consumption function is equal to

Accepted Answer

A) the change in consumption divided by the change in disposable income. 
B) the change in consumption divided by the change in personal income. 
C) the change in disposable income divided by the change in consumption. 
D) the change in national income divided by the change in consumption. 
A) the change in consumption divided by the change in disposable income. 
B) the change in consumption divided by the change in personal income. 
C) the change in disposable income divided by the change in consumption. 
D) the change in national income divided by the change in consumption.

Question 18

Which of the following is a true statement about the multiplier?

Accepted Answer

A) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports,inflation and the interest rate. 
B) The larger the MPC,the smaller the multiplier. 
C) The multiplier is the ratio of the change in spending to the change in GDP. 
D) The multiplier makes the economy less sensitive to changes in autonomous expenditure. 
A) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports,inflation and the interest rate. 
B) The larger the MPC,the smaller the multiplier. 
C) The multiplier is the ratio of the change in spending to the change in GDP. 
D) The multiplier makes the economy less sensitive to changes in autonomous expenditure.

Question 19

Planned aggregate expenditure is equal to

Accepted Answer

A) consumption spending only. 
B) consumption spending plus planned investment spending. 
C) planned investment spending only. 
D) consumption spending plus planned investment spending plus government purchases plus net exports. 
A) consumption spending only. 
B) consumption spending plus planned investment spending. 
C) planned investment spending only. 
D) consumption spending plus planned investment spending plus government purchases plus net exports.

Question 20

Firms in a small economy planned that inventories would grow over the past year by $300,000.Over that year,inventories actually grew by $400,000.This implies that

Accepted Answer

A) aggregate expenditure that year was less than GDP that year. 
B) there was an unplanned decrease in inventories that year. 
C) there was a planned decrease in inventories that year. 
D) aggregate expenditure that year was equal to GDP that year. 
A) aggregate expenditure that year was less than GDP that year. 
B) there was an unplanned decrease in inventories that year. 
C) there was a planned decrease in inventories that year. 
D) aggregate expenditure that year was equal to GDP that year.

Goods that have been produced but not yet sold are referred to as

Which of the following is not one of the four main categories of spending identified by John Maynard Keynes?

During a(n) many firms experience reduced profits,which reduces and investment spending.

Equations for C,I,G,and NX are given below.If the equilibrium level of GDP is $32,000,what will the new equilibrium level of GDP be if government spending increases to 2,500? C = 5,000 + (MPC)Y I = 1,500 G = 2,000 NX = -500

Economists first began studying the relationship between changes in aggregate expenditures and changes in GDP

Figure 12-1 -Refer to Figure 12-1.If the economy is in equilibrium,it is at a level of aggregate expenditure given by point

Given the equations for C,I,G,and NX below,what is the marginal propensity to consume? C = 1,000 + 0.8Y I = 1,500 G = 1,250 NX = 100

Table 12-13 -Refer to Table 12-13.Using the table above,answer the following questions.The numbers in the table are in billions of dollars. a.What is the equilibrium level of real GDP? b.What is the MPC? c.If investment spending declines by $50 billion,what will happen to equilibrium GDP?

Why do economists care about aggregate expenditures?

Aggregate expenditure includes spending on

Macroeconomic equilibrium can occur at any point on the 45-degree line.

If firms sell what they expected to sell,which of the following will be true?

If the consumption function is defined as C = 7,250 + 0.8Y,what is the multiplier?

A decrease in Social Security payments will

Macroeconomic equilibrium occurs when

The slope of the consumption function is equal to

Which of the following is a true statement about the multiplier?

Planned aggregate expenditure is equal to

Firms in a small economy planned that inventories would grow over the past year by $300,000.Over that year,inventories actually grew by $400,000.This implies that

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

Goods that have been produced but not yet sold are referred to as

Which of the following is not one of the four main categories of spending identified by John Maynard Keynes?

During a(n)________ many firms experience reduced profits,which reduces ________ and investment spending.

Equations for C,I,G,and NX are given below.If the equilibrium level of GDP is $32,000,what will the new equilibrium level of GDP be if government spending increases to 2,500? C = 5,000 + (MPC)Y I = 1,500 G = 2,000 NX = -500

Economists first began studying the relationship between changes in aggregate expenditures and changes in GDP

Figure 12-1 -Refer to Figure 12-1.If the economy is in equilibrium,it is at a level of aggregate expenditure given by point

Given the equations for C,I,G,and NX below,what is the marginal propensity to consume? C = 1,000 + 0.8Y I = 1,500 G = 1,250 NX = 100

Table 12-13 -Refer to Table 12-13.Using the table above,answer the following questions.The numbers in the table are in billions of dollars. a.What is the equilibrium level of real GDP? b.What is the MPC? c.If investment spending declines by $50 billion,what will happen to equilibrium GDP?

Why do economists care about aggregate expenditures?

Aggregate expenditure includes spending on

Macroeconomic equilibrium can occur at any point on the 45-degree line.

If firms sell what they expected to sell,which of the following will be true?

If the consumption function is defined as C = 7,250 + 0.8Y,what is the multiplier?

A decrease in Social Security payments will

Macroeconomic equilibrium occurs when

The slope of the consumption function is equal to

Which of the following is a true statement about the multiplier?

Planned aggregate expenditure is equal to

Firms in a small economy planned that inventories would grow over the past year by $300,000.Over that year,inventories actually grew by $400,000.This implies that

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

During a(n) many firms experience reduced profits,which reduces and investment spending.