Question 1

Refer to the information provided in Figure 8.5 below to answer the questions that follow.
  Figure 8.5
-Refer to Figure 8.5.The MPS for this saving function is

Accepted Answer

A) 5. 
B) 4. 
C) 0.5. 
D) 0.25.

Question 2

In 2012 Happyland's planned investment was $90 billion and its actual investment was $140 billion.In 2012 Happyland's unplanned inventory change was

Accepted Answer

A) -$115 billion. 
B) -$50 billion. 
C) $50 billion. 
D) $230 billion.

Question 3

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 = 10 + 0.8Y,the consumption function that best fits C2 is

Accepted Answer

A) C2 = 20 + 0.8Y. 
B) C2 = 10 + 0.4Y. 
C) C2 = 40 + 0.5Y. 
D) C2 = 20 + 0.1Y.

Question 4

Refer to the information provided in Figure 8.4 below to answer the questions that follow.
  Figure 8.4
-Refer to Figure 8.4.If income is Y2

Accepted Answer

A) the society's saving is negative along C1,C2,and C3. 
B) the society's consumption is equal along C2 and C3. 
C) the society's saving is positive along C2 and C3. 
D) the society's savings is negative along C1.

Question 5

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.

Question 6

Refer to the information provided in Table 8.4 below to answer the questions that follow.
Table 8.4
 
-Refer to Table 8.4.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.

Question 7

If planned investment increases,equilibrium will be restored only when saving has increased by exactly the amount of the initial increase in planned investment,assuming there is no government or foreign sector.

Accepted Answer

A) True 
 B)False

Question 8

Refer to the information provided in Table 8.1 below to answer the questions that follow.
Table 8.1
 
-Refer to Table 8.1.The equation for the aggregate consumption function is

Accepted Answer

A) C = 80 + 0.95Y. 
B) C = 80 + 0.9Y. 
C) C = 80 + 0.75Y. 
D) C = -80 + 0.45Y.

Question 9

The ratio of the change in the equilibrium level of output to a change in some autonomous variable is the

Accepted Answer

A) elasticity coefficient. 
B) multiplier. 
C) automatic stabilizer. 
D) marginal propensity of the autonomous variable.

Question 10

If the saving function is of the form S = -20 + 0.3Y,consumption at an income level of 200 is

Accepted Answer

A) 80. 
B) 120. 
C) 160. 
D) 180.

Question 11

Assume there is no government or foreign sector.If the MPS is 0.2,a $40 billion decrease in planned investment will cause aggregate output to decrease by

Accepted Answer

A) $20 billion. 
B) $50 billion. 
C) $80 billion. 
D) $200 billion.

Question 12

Without the government or the foreign sector in the income-expenditure model,planned aggregate expenditure equals

Accepted Answer

A) consumption plus actual investment. 
B) consumption plus inventory adjustment. 
C) consumption minus planned investment. 
D) consumption plus planned investment.

Question 13

Assuming there is no government or foreign sector,the formula for the multiplier is

Accepted Answer

A) 1/(1 - MP
C) . 
B) 1/MPC. 
C) 1/(1 + MP
C) . 
D) 1 - MPC.

Question 14

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.

Question 15

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.

Question 16

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 income is $400 billion,aggregate saving is ________ billion.

Accepted Answer

A) -$300 
B) -$100 
C) $0 
D) $500

Question 17

Refer to the information provided in Table 8.4 below to answer the questions that follow.
Table 8.4
 
-Refer to Table 8.4.At an aggregate output level of $600 billion,the unplanned inventory change is

Accepted Answer

A) -$100 billion. 
B) -$50 billion. 
C) $0. 
D) $50 billion.

Question 18

Refer to the information provided in Figure 8.9 below to answer the questions that follow.
  Figure 8.9
-Refer to Figure 8.9.How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result of a decrease in investment by $20 million?

Accepted Answer

A) AE line shifts down,increasing equilibrium output and equilibrium expenditure. 
B) AE line shifts up,increasing equilibrium output and equilibrium expenditure. 
C) AE line shifts down,decreasing equilibrium output and equilibrium expenditure. 
D) AE line shifts down,increasing equilibrium output and decreasing equilibrium expenditure.

Question 19

Suppose saving is $1,400 when income is $10,000 and the MPC equals 0.8.When income increases to $12,000,saving is

Accepted Answer

A) $1,680. 
B) $1,800. 
C) $2,200. 
D) $3,000.

Question 20

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.

Exam 8: Aggregate Expenditure and Equilibrium Output

Refer to the information provided in Figure 8.5 below to answer the questions that follow. Figure 8.5 -Refer to Figure 8.5.The MPS for this saving function is

In 2012 Happyland's planned investment was $90 billion and its actual investment was $140 billion.In 2012 Happyland's unplanned inventory change was

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 = 10 + 0.8Y,the consumption function that best fits C₂ 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.If income is Y₂

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

Refer to the information provided in Table 8.4 below to answer the questions that follow. Table 8.4 -Refer to Table 8.4.At an aggregate output level of $800 billion,aggregate saving

If planned investment increases,equilibrium will be restored only when saving has increased by exactly the amount of the initial increase in planned investment,assuming there is no government or foreign sector.

Refer to the information provided in Table 8.1 below to answer the questions that follow. Table 8.1 -Refer to Table 8.1.The equation for the aggregate consumption function is

The ratio of the change in the equilibrium level of output to a change in some autonomous variable is the

If the saving function is of the form S = -20 + 0.3Y,consumption at an income level of 200 is

Assume there is no government or foreign sector.If the MPS is 0.2,a $40 billion decrease in planned investment will cause aggregate output to decrease by

Without the government or the foreign sector in the income-expenditure model,planned aggregate expenditure equals

Assuming there is no government or foreign sector,the formula for the multiplier is

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

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 Figure 8.5 below to answer the questions that follow. Figure 8.5 -Refer to Figure 8.5.If aggregate income is $400 billion,aggregate saving is ________ billion.

Refer to the information provided in Table 8.4 below to answer the questions that follow. Table 8.4 -Refer to Table 8.4.At an aggregate output level of $600 billion,the unplanned inventory change is

Refer to the information provided in Figure 8.9 below to answer the questions that follow. Figure 8.9 -Refer to Figure 8.9.How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result of a decrease in investment by $20 million?

Suppose saving is $1,400 when income is $10,000 and the MPC equals 0.8.When income increases to $12,000,saving 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

Exam 8: Aggregate Expenditure and Equilibrium Output

Refer to the information provided in Figure 8.5 below to answer the questions that follow. Figure 8.5 -Refer to Figure 8.5.The MPS for this saving function is

In 2012 Happyland's planned investment was $90 billion and its actual investment was $140 billion.In 2012 Happyland's unplanned inventory change was

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 = 10 + 0.8Y,the consumption function that best fits C2 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.If income is Y2

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

Refer to the information provided in Table 8.4 below to answer the questions that follow. Table 8.4 -Refer to Table 8.4.At an aggregate output level of $800 billion,aggregate saving

If planned investment increases,equilibrium will be restored only when saving has increased by exactly the amount of the initial increase in planned investment,assuming there is no government or foreign sector.

Refer to the information provided in Table 8.1 below to answer the questions that follow. Table 8.1 -Refer to Table 8.1.The equation for the aggregate consumption function is

The ratio of the change in the equilibrium level of output to a change in some autonomous variable is the

If the saving function is of the form S = -20 + 0.3Y,consumption at an income level of 200 is

Assume there is no government or foreign sector.If the MPS is 0.2,a $40 billion decrease in planned investment will cause aggregate output to decrease by

Without the government or the foreign sector in the income-expenditure model,planned aggregate expenditure equals

Assuming there is no government or foreign sector,the formula for the multiplier is

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

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 Figure 8.5 below to answer the questions that follow. Figure 8.5 -Refer to Figure 8.5.If aggregate income is $400 billion,aggregate saving is ________ billion.

Refer to the information provided in Table 8.4 below to answer the questions that follow. Table 8.4 -Refer to Table 8.4.At an aggregate output level of $600 billion,the unplanned inventory change is

Refer to the information provided in Figure 8.9 below to answer the questions that follow. Figure 8.9 -Refer to Figure 8.9.How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result of a decrease in investment by $20 million?

Suppose saving is $1,400 when income is $10,000 and the MPC equals 0.8.When income increases to $12,000,saving 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 8.4 below to answer the questions that follow. Figure 8.4 -Refer to Figure 8.4.Suppose the consumption function for C₁ = 10 + 0.8Y,the consumption function that best fits C₂ 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.If income is Y₂