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1.
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In
the consumption function: C = a + b(Y - NT), the term b represents the a | intercept of the
consumption function | d | level of
income | b | level of taxation | e | marginal propensity to consume | c | level of net
taxation | | | | |
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2.
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In
Exhibit 0045, the government's budget is a | in surplus | c | in balance | b | in
deficit | d | indeterminate
from the information given | | | | |
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3.
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In
Exhibit 0045, which of the variables are autonomous? a | saving and
consumption only | b | net taxes and government purchases
only | c | net exports and
government purchases only | d | consumption, investment, and net exports
only | e | investment, net
exports, net taxes, and government purchases | | |
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4.
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In
Exhibit 0045, the marginal propensity to consume (out of disposable income) equals
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5.
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In
Exhibit 0045, the equilibrium level of income is a | $5.4 trillion | b | where real GDP =
total planned expenditures | c | where disposable income = total planned
expenditures | d | $4.8 trillion | e | where the
government has a balanced budget, which is at each level of income in this
example | | |
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6.
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Which
of the following is not true at the equilibrium quantity of GDP demanded? Refer to Exhibit
0045. a | aggregate
expenditure equals real GDP | b | planned investment equals actual
investment | c | planned investment equals saving | d | planned
investment is greater than unintended inventory adjustment | e | planned
injections into the circular flow are less than planned leakages out of the
flow | | |
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7.
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The
smaller the marginal propensity to save, other things constant, the a | smaller the
marginal propensity to consume | c | steeper the
saving function | b | smaller the multiplier | d | larger the multiplier | | | | |
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8.
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Suppose that planned investment increases by $200 billion and that the marginal
propensity to consume equals 0.80. The aggregate expenditure function will shift upward by __________
at every level of real GDP. a | $40 billion | b | $160 billion | c | $200 billion | d | $250 billion | e | $1,000 billion | | | | | | | | | | |
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9.
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According to the graph in Exhibit 0031, if the price level increases, the new
equilibrium level of real GDP must be a | less than $20 | c | zero | e | greater than $200 | b | less than
$100 | d | greater than
$100 | | | | | | |
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10.
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According to the graph in Exhibit 0031, if government purchases increase by
$20, the new equilibrium level of real GDP must be
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11.
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The
loss of jobs as a result of the September 11, 2001 attack in New York a | affected all
sectors of the economy because of the multiplier effect | b | affected only
the airline and travel industries | c | had little effect on the national
economy | d | was concentrated in New York City | e | explains why job
losses are larger within a state than for the nation as a whole | | |
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12.
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Suppose that a pair of graphs represents a situation in which both the aggregate
expenditure line and the aggregate demand curve have shifted. Looking at this pair of graphs, you can
conclude that the shift of the aggregate expenditure line was caused by a change in a | disposable
income | c | the level of
income | e | the level of
real GDP | b | the price level | d | autonomous investment | | | | | | |
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13.
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The
drop in consumption spending that triggered Japan's worst recession in decades a | was caused by a
reduction in consumer wealth | b | was caused by the Japanese government's economic
policies | c | can be traced to an increase in Japanese
imports | d | was caused by an increase in the Japanese price
level | e | was quickly reversed by pro-consumer economic
policies | | |
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14.
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If Y
= C + I + G + (X - M) and Y = $190, C = $100, I = $50 and G = $50 then, in equilibrium, X - M must
equal
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15.
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Given
that leakages must equal injections in equilibrium, which of the following is true? a | S + NT + NX = G
+ I | c | C + S = G +
I | e | the answer is
indeterminate | b | S = I | d | S + NT = NX + G + I | | | | | | |
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