Question 1

U.S.net export spending rises when

Accepted Answer

A) the price level in the United States rises relative to the price level in other countries. 
B) the growth rate of U.S.GDP is slower than the growth rate of GDP in other countries. 
C) the value of the U.S.dollar increases relative to other currencies. 
D) the inflation rate is higher in the United States relative to other countries. 
A) the price level in the United States rises relative to the price level in other countries. 
B) the growth rate of U.S.GDP is slower than the growth rate of GDP in other countries. 
C) the value of the U.S.dollar increases relative to other currencies. 
D) the inflation rate is higher in the United States relative to other countries.

Question 2

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

Accepted Answer

A) 5. 
B) 0.75. 
C) 0.20. 
D) 0.15. 
A) 5. 
B) 0.75. 
C) 0.20. 
D) 0.15.

Question 3

Consumption spending is $22 million,planned investment spending is $7 million,actual investment spending is $7 million,government purchases are $9 million,and net export spending is $3 million.Based on this information,which of the following is true?

Accepted Answer

A) There was an unplanned change in inventories. 
B) Aggregate expenditure is equal to GDP. 
C) Aggregate expenditure is greater than GDP. 
D) Aggregate expenditure is less than GDP. 
A) There was an unplanned change in inventories. 
B) Aggregate expenditure is equal to GDP. 
C) Aggregate expenditure is greater than GDP. 
D) Aggregate expenditure is less than GDP.

Question 4

When aggregate expenditure = GDP,

Accepted Answer

A) macroeconomic equilibrium occurs. 
B) the federal budget is balanced. 
C) net exports equal zero. 
D) saving equals zero. 
A) macroeconomic equilibrium occurs. 
B) the federal budget is balanced. 
C) net exports equal zero. 
D) saving equals zero.

Question 5

A decrease in consumer confidence can put your job at risk if

Accepted Answer

A) aggregate expenditures fall. 
B) consumers expect their incomes to rise in the future. 
C) aggregate expenditures rise. 
D) consumers expect firms to increase investment in the future. 
A) aggregate expenditures fall. 
B) consumers expect their incomes to rise in the future. 
C) aggregate expenditures rise. 
D) consumers expect firms to increase investment in the future.

Question 6

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

Accepted Answer

A) aggregate demand curve 
B) savings line 
C) 45-degree line 
D) consumption function 
A) aggregate demand curve 
B) savings line 
C) 45-degree line 
D) consumption function

Question 7

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP,then

Accepted Answer

A) the multiplier is 0.1. 
B) the multiplier is 1. 
C) the multiplier is 10. 
D) the multiplier is 100. 
A) the multiplier is 0.1. 
B) the multiplier is 1. 
C) the multiplier is 10. 
D) the multiplier is 100.

Question 8

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

Accepted Answer

A) increase consumption by $9 million. 
B) increase consumption by $1 million. 
C) decrease consumption by $9 million. 
D) decrease consumption by $1 million. 
A) increase consumption by $9 million. 
B) increase consumption by $1 million. 
C) decrease consumption by $9 million. 
D) decrease consumption by $1 million.

Question 9

The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China,which is assembly,is

Accepted Answer

A) 4 percent. 
B) 12 percent. 
C) 25 percent. 
D) 65 percent. 
A) 4 percent. 
B) 12 percent. 
C) 25 percent. 
D) 65 percent.

Question 10

Autonomous expenditure is a type of expenditure that does not depend on

Accepted Answer

A) wealth. 
B) expectations. 
C) rates. 
D) GDP. 
A) wealth. 
B) expectations. 
C) rates. 
D) GDP.

Question 11

If planned investment is equal to actual investment,then aggregate expenditure is equal to GDP.

Accepted Answer

A) True 
 B)False

Question 12

If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP,then

Accepted Answer

A) the multiplier is 0.125. 
B) the multiplier is 3.5. 
C) the multiplier is 8. 
D) the multiplier is 50. 
A) the multiplier is 0.125. 
B) the multiplier is 3.5. 
C) the multiplier is 8. 
D) the multiplier is 50.

Question 13

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 1,000 + 0.8Y
I = 1,500
G = 1,250
NX = 100

Accepted Answer

A) $3,080 
B) $3,850 
C) $6,930 
D) $19,250 
A) $3,080 
B) $3,850 
C) $6,930 
D) $19,250

Question 14

What impact does a higher price level have on interest rates,wealth,and investment spending?

Accepted Answer

A higher price level reduces t

Question 15

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending,

Accepted Answer

A) this will increase investment spending in the short run and expand the economy in the long run. 
B) the economy will benefit in the short run but the effect will not last into the long run. 
C) this will have a major negative impact on the economy in both the short run and in the long run. 
D) they may make themselves worse off by causing aggregate expenditure to fall,thereby pushing the economy into a recession. 
A) this will increase investment spending in the short run and expand the economy in the long run. 
B) the economy will benefit in the short run but the effect will not last into the long run. 
C) this will have a major negative impact on the economy in both the short run and in the long run. 
D) they may make themselves worse off by causing aggregate expenditure to fall,thereby pushing the economy into a recession.

Question 16

A stock market crash which causes stock prices to fall should cause

Accepted Answer

A) a decrease in consumption spending. 
B) an increase in consumption spending. 
C) an increase in wealth. 
D) no change in consumption spending. 
A) a decrease in consumption spending. 
B) an increase in consumption spending. 
C) an increase in wealth. 
D) no change in consumption spending.

Question 17

Which is the smallest component of aggregate expenditure?

Accepted Answer

A) planned investment expenditures 
B) consumption expenditures 
C) government expenditures 
D) net export expenditures 
A) planned investment expenditures 
B) consumption expenditures 
C) government expenditures 
D) net export expenditures

Question 18

Assume that inventories declined by more than analysts predicted.This implies that

Accepted Answer

A) planned aggregate expenditure was greater than real GDP. 
B) planned aggregate expenditure was equal to real GDP. 
C) planned aggregate expenditure was less than real GDP. 
D) planned aggregate expenditure is unrelated to real GDP. 
A) planned aggregate expenditure was greater than real GDP. 
B) planned aggregate expenditure was equal to real GDP. 
C) planned aggregate expenditure was less than real GDP. 
D) planned aggregate expenditure is unrelated to real GDP.

Question 19

Table 12-10
  
-Refer to Table 12-10.Using the table above,calculate the unplanned change in inventories for each level of GDP,and explain what will happen to GDP?

Accepted Answer

The macroeconomic equilibrium is determi

Question 20

Consumption spending will ________ when disposable income ________.

Accepted Answer

A) increase;increases 
B) increase;decreases 
C) decrease;increases 
D) change unpredictably;decreases 
A) increase;increases 
B) increase;decreases 
C) decrease;increases 
D) change unpredictably;decreases

U.S.net export spending rises when

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

Consumption spending is $22 million,planned investment spending is $7 million,actual investment spending is $7 million,government purchases are $9 million,and net export spending is $3 million.Based on this information,which of the following is true?

When aggregate expenditure = GDP,

A decrease in consumer confidence can put your job at risk if

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP,then

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China,which is assembly,is

Autonomous expenditure is a type of expenditure that does not depend on

If planned investment is equal to actual investment,then aggregate expenditure is equal to GDP.

If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP,then

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 1,000 + 0.8Y I = 1,500 G = 1,250 NX = 100

What impact does a higher price level have on interest rates,wealth,and investment spending?

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending,

A stock market crash which causes stock prices to fall should cause

Which is the smallest component of aggregate expenditure?

Assume that inventories declined by more than analysts predicted.This implies that

Table 12-10 -Refer to Table 12-10.Using the table above,calculate the unplanned change in inventories for each level of GDP,and explain what will happen to GDP?

Consumption spending will when disposable income .

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

U.S.net export spending rises when

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

Consumption spending is $22 million,planned investment spending is $7 million,actual investment spending is $7 million,government purchases are $9 million,and net export spending is $3 million.Based on this information,which of the following is true?

When aggregate expenditure = GDP,

A decrease in consumer confidence can put your job at risk if

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP,then

If the marginal propensity to save is 0.1,then a $10 million decrease in disposable income will

The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China,which is assembly,is

Autonomous expenditure is a type of expenditure that does not depend on

If planned investment is equal to actual investment,then aggregate expenditure is equal to GDP.

If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP,then

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 1,000 + 0.8Y I = 1,500 G = 1,250 NX = 100

What impact does a higher price level have on interest rates,wealth,and investment spending?

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending,

A stock market crash which causes stock prices to fall should cause

Which is the smallest component of aggregate expenditure?

Assume that inventories declined by more than analysts predicted.This implies that

Table 12-10 -Refer to Table 12-10.Using the table above,calculate the unplanned change in inventories for each level of GDP,and explain what will happen to GDP?

Consumption spending will ________ when disposable income ________.

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

Consumption spending will when disposable income .