Question 1

Assume there is no government or foreign sector. If the MPS is 0.10, a $20 billion decrease in planned investment will cause aggregate output to decrease by

Accepted Answer

A)  $20 billion. 
B)  $50 billion. 
C)  $100 billion. 
D)  $200 billion.

Question 2

Midwest State University in Nebraska is trying to convince Nebraska taxpayers that the tax dollars spent at Midwest State University are well spent. One of the university's arguments is that for every $1 spent by Midwest State University an additional $5 of expenditures are generated within Nebraska. Midwest State University is arguing that the multiplier for their expenditures is

Accepted Answer

A)  0.2. 
B)  1. 
C)  4. 
D)  5.

Question 3

If unplanned inventory investment is zero

Accepted Answer

A)  aggregate output equals planned aggregate expenditures. 
B)  aggregate output is greater than planned aggregate expenditures. 
C)  aggregate output is less than planned aggregate expenditures. 
D)  aggregate output is positive when planned aggregate expenditures are positive.

Question 4

Assuming there is no government or foreign sector, if the multiplier is 10, the MPC is

Accepted Answer

A)  0.9. 
B)  0.8. 
C)  0.5. 
D)  0.1.

Question 5

The economy can be in equilibrium if, and only if,

Accepted Answer

A)  planned investment is zero. 
B)  actual investment is zero. 
C)  planned investment is greater than actual investment. 
D)  planned investment equals actual investment.

Question 6

If the saving function is of the form [S = -15 + 0.4Y], consumption at an income level of 200 is

Accepted Answer

A)  80. 
B)  105. 
C)  135. 
D)  185.

Question 7

Refer to the information provided in Figure 8.3 below to answer the questions that follow.  Figure 8.3
-Refer to Figure 8.3. [-60 + 0.3Y] is this society's

Accepted Answer

A)  MPC. 
B)  MPS. 
C)  saving function. 
D)  consumption function.

Question 8

Refer to the information provided in Figure 8.2 below to answer the questions that follow.  Figure 8.2
-Refer to Figure 8.2. Jerry's saving is positive along the line segment

Accepted Answer

A)  BD. 
B)  DA. 
C)  BA. 
D)  AC.

Question 9

If the MPS is 0.22, the MPC is

Accepted Answer

A)  -0.22. 
B)  0.66. 
C)  0.78. 
D)  1.22.

Question 10

The Slippery Slope Company manufactures only snow skis. In 2016 Slippery Slope manufactured 10,000 snow skis, but sold 12,000 snow skis. In 2016 Slippery Slope's change in inventory was ________ snow skis.

Accepted Answer

A)  -8,000 
B)  -2,000 
C)  2,000 
D)  22,000

Question 11

Refer to the information provided in Figure 8.1 below to answer the questions that follow.  Figure 8.1
-Refer to Figure 8.1. An increase in the amount of consumption this household makes when this household's income is zero

Accepted Answer

A)  makes the consumption function steeper. 
B)  makes the saving function flatter. 
C)  shifts the consumption function downward. 
D)  shifts the saving function downward.

Question 12

If unplanned business investment is $20 million and planned investment is $20 million, then actual investment is

Accepted Answer

A)  -$20 million. 
B)  $20 million. 
C)  $40 million. 
D)  $200 million.

Question 13

Assume there is no government or foreign sector. If the multiplier is 10, a $10 billion increase in planned investment will cause aggregate output to increase by

Accepted Answer

A)  $1 billion. 
B)  $5 billion. 
C)  $10 billion. 
D)  $100 billion.

Question 14

Refer to the information provided in Table 8.10 below to answer the questions that follow.
Table 8.10 
-Refer to Table 8.10. At an aggregate output level of $2,000 million, the unplanned inventory change is

Accepted Answer

A)  -$800 million. 
B)  -$200 million. 
C)  $700 million. 
D)  $800 million.

Question 15

Refer to the information provided in Figure 8.1 below to answer the questions that follow.  Figure 8.1
-Refer to Figure 8.1. The ________ for this household is 0.5 and the ________ is also 0.5.

Accepted Answer

A)  MPC; MPS 
B)  MPC; consumption function 
C)  MPS; saving function 
D)  consumption function; saving function

Question 16

Refer to the information provided in Figure 8.11 below to answer the questions that follow.  Figure 8.11
-Refer to Figure 8.11. A ________ increase in investment changes equilibrium output to $240 million.

Accepted Answer

A)  $5 million 
B)  $10 million 
C)  $20 million 
D)  $50 million

Question 17

Refer to the information provided in Figure 8.2 below to answer the questions that follow.  Figure 8.2
-Refer to Figure 8.2. Jerry's ________ equals his ________ at Point A.

Accepted Answer

A)  consumption; saving 
B)  consumption; income 
C)  saving; income 
D)  all of the above

Question 18

Related to the Economics in Practice on p. 146: Under the Save More Tomorrow retirement plans, employees can pre-commit to save more

Accepted Answer

A)  when the opt out of the social security system. 
B)  whenever they get a pay raise. 
C)  at the beginning of each fiscal year. 
D)  when income tax rates increase.

Question 19

Refer to the information provided in Figure 8.9 below to answer the questions that follow.  Figure 8.9
-Refer to Figure 8.9. [150 + 0.25Y] is the

Accepted Answer

A)  MPC. 
B)  MPS. 
C)  saving function. 
D)  aggregate expenditures function.

Question 20

Refer to the information provided in Table 8.9 below to answer the questions that follow.
Table 8.9 
-Refer to Table 8.9. Planned investment equals actual investment at

Accepted Answer

A)  all income levels. 
B)  all income levels above $300 billion. 
C)  all income levels below $300 billion. 
D)  $500 billion.

Exam 8: Aggregate Expenditure and Equilibrium Output

Assume there is no government or foreign sector. If the MPS is 0.10, a $20 billion decrease in planned investment will cause aggregate output to decrease by

If unplanned inventory investment is zero

Assuming there is no government or foreign sector, if the multiplier is 10, the MPC is

The economy can be in equilibrium if, and only if,

If the saving function is of the form [S = -15 + 0.4Y], consumption at an income level of 200 is

Refer to the information provided in Figure 8.3 below to answer the questions that follow. Figure 8.3 -Refer to Figure 8.3. [-60 + 0.3Y] is this society's

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. Jerry's saving is positive along the line segment

If the MPS is 0.22, the MPC is

The Slippery Slope Company manufactures only snow skis. In 2016 Slippery Slope manufactured 10,000 snow skis, but sold 12,000 snow skis. In 2016 Slippery Slope's change in inventory was ________ snow skis.

Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1 -Refer to Figure 8.1. An increase in the amount of consumption this household makes when this household's income is zero

If unplanned business investment is $20 million and planned investment is $20 million, then actual investment is

Assume there is no government or foreign sector. If the multiplier is 10, a $10 billion increase in planned investment will cause aggregate output to increase by

Refer to the information provided in Table 8.10 below to answer the questions that follow. Table 8.10 -Refer to Table 8.10. At an aggregate output level of $2,000 million, the unplanned inventory change 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. The for this household is 0.5 and the is also 0.5.

Refer to the information provided in Figure 8.11 below to answer the questions that follow. Figure 8.11 -Refer to Figure 8.11. A ________ increase in investment changes equilibrium output to $240 million.

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. Jerry's equals his at Point A.

Related to the Economics in Practice on p. 146: Under the Save More Tomorrow retirement plans, employees can pre-commit to save more

Refer to the information provided in Figure 8.9 below to answer the questions that follow. Figure 8.9 -Refer to Figure 8.9. [150 + 0.25Y] is the

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. Planned investment equals actual investment at

Exam 8: Aggregate Expenditure and Equilibrium Output

Assume there is no government or foreign sector. If the MPS is 0.10, a $20 billion decrease in planned investment will cause aggregate output to decrease by

If unplanned inventory investment is zero

Assuming there is no government or foreign sector, if the multiplier is 10, the MPC is

The economy can be in equilibrium if, and only if,

If the saving function is of the form [S = -15 + 0.4Y], consumption at an income level of 200 is

Refer to the information provided in Figure 8.3 below to answer the questions that follow. Figure 8.3 -Refer to Figure 8.3. [-60 + 0.3Y] is this society's

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. Jerry's saving is positive along the line segment

If the MPS is 0.22, the MPC is

The Slippery Slope Company manufactures only snow skis. In 2016 Slippery Slope manufactured 10,000 snow skis, but sold 12,000 snow skis. In 2016 Slippery Slope's change in inventory was ________ snow skis.

Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1 -Refer to Figure 8.1. An increase in the amount of consumption this household makes when this household's income is zero

If unplanned business investment is $20 million and planned investment is $20 million, then actual investment is

Assume there is no government or foreign sector. If the multiplier is 10, a $10 billion increase in planned investment will cause aggregate output to increase by

Refer to the information provided in Table 8.10 below to answer the questions that follow. Table 8.10 -Refer to Table 8.10. At an aggregate output level of $2,000 million, the unplanned inventory change 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. The ________ for this household is 0.5 and the ________ is also 0.5.

Refer to the information provided in Figure 8.11 below to answer the questions that follow. Figure 8.11 -Refer to Figure 8.11. A ________ increase in investment changes equilibrium output to $240 million.

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. Jerry's ________ equals his ________ at Point A.

Related to the Economics in Practice on p. 146: Under the Save More Tomorrow retirement plans, employees can pre-commit to save more

Refer to the information provided in Figure 8.9 below to answer the questions that follow. Figure 8.9 -Refer to Figure 8.9. [150 + 0.25Y] is the

Refer to the information provided in Table 8.9 below to answer the questions that follow. Table 8.9 -Refer to Table 8.9. Planned investment equals actual investment at

Refer to the information provided in Figure 8.1 below to answer the questions that follow. Figure 8.1 -Refer to Figure 8.1. The for this household is 0.5 and the is also 0.5.

Refer to the information provided in Figure 8.2 below to answer the questions that follow. Figure 8.2 -Refer to Figure 8.2. Jerry's equals his at Point A.