Question 1

Among the following,which would not be considered part of the investment component of GDP?

Accepted Answer

A)  manufacturers' equipment 
B)  buying corporate stock 
C)  new houses 
D)  business structures 
A)  manufacturers' equipment 
B)  buying corporate stock 
C)  new houses 
D)  business structures B

Question 2

In Macronesia,the MPC is approximately .80.If disposable income changes from 1,000 billion pukas to 1,500 billion pukas,then consumption will change by a(n)

Accepted Answer

A)  decrease of 500 billion pukas. 
B)  increase of 500 billion pukas. 
C)  increase of 400 billion pukas. 
D)  increase of 800 billion pukas. 
A)  decrease of 500 billion pukas. 
B)  increase of 500 billion pukas. 
C)  increase of 400 billion pukas. 
D)  increase of 800 billion pukas. C

Question 3

Historical data representing consumption and disposable income reveals that

Accepted Answer

A)  during the 1930s,U.S.saving was at a high level. 
B)  U.S.citizens increased saving during World War II. 
C)  there is no systematic relationship between the two. 
D)  consumption rises faster than disposable income during recessions. 
A)  during the 1930s,U.S.saving was at a high level. 
B)  U.S.citizens increased saving during World War II. 
C)  there is no systematic relationship between the two. 
D)  consumption rises faster than disposable income during recessions. B

Question 4

Disposable income is obtained by

Accepted Answer

A)  subtracting personal income taxes from personal income. 
B)  subtracting personal income taxes from national income. 
C)  adding transfer payments to national income. 
D)  adding transfer payments to personal income. 
A)  subtracting personal income taxes from personal income. 
B)  subtracting personal income taxes from national income. 
C)  adding transfer payments to national income. 
D)  adding transfer payments to personal income.

Question 5

The federal government's principal tool in altering consumer spending is changing

Accepted Answer

A)  corporate income taxes. 
B)  federal sales taxes. 
C)  unemployment insurance benefits. 
D)  personal income tax rates. 
A)  corporate income taxes. 
B)  federal sales taxes. 
C)  unemployment insurance benefits. 
D)  personal income tax rates.

Question 6

When the price level falls,consumers may feel wealthier and the consumption function will shift upward.

Accepted Answer

A) True 
 B)False

Question 7

U.S.imports rise when income in the United States increases.

Accepted Answer

A) True 
 B)False

Question 8

Investment goods are counted in GDP because they are

Accepted Answer

A)  intermediate goods. 
B)  purchased in their final form. 
C)  usually exported as foreign investment. 
D)  deductible business expenses. 
A)  intermediate goods. 
B)  purchased in their final form. 
C)  usually exported as foreign investment. 
D)  deductible business expenses.

Question 9

The majority of payments made by the federal government are for

Accepted Answer

A)  transfer payments. 
B)  administrative expenses. 
C)  foreign aid. 
D)  defense purchases 
A)  transfer payments. 
B)  administrative expenses. 
C)  foreign aid. 
D)  defense purchases

Question 10

A decrease in disposable income causes a shift in the consumption function.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following transactions is included in GDP?

Accepted Answer

A)  You buy a used car for $10,000. 
B)  An unemployed worker receives a check for $450 as unemployment benefits. 
C)  You buy a one-acre lot in Florida where you plan to build a beach house. 
D)  Toyota builds 1,000 Accords in Kentucky at a cost of $25,000 each but is unable to sell them and,therefore,they are added to inventory. 
A)  You buy a used car for $10,000. 
B)  An unemployed worker receives a check for $450 as unemployment benefits. 
C)  You buy a one-acre lot in Florida where you plan to build a beach house. 
D)  Toyota builds 1,000 Accords in Kentucky at a cost of $25,000 each but is unable to sell them and,therefore,they are added to inventory.

Question 12

In 1963,government economists assumed that the MPC for the United States was approximately 0.90.If taxes were cut by $9 billion,then consumer expenditures would initially be expected to

Accepted Answer

A)  decrease by $9.0 billion. 
B)  increase by $9.0 billion. 
C)  decrease by $8.1 billion. 
D)  increase by $8.1 billion. 
A)  decrease by $9.0 billion. 
B)  increase by $9.0 billion. 
C)  decrease by $8.1 billion. 
D)  increase by $8.1 billion.

Question 13

What is the marginal propensity to consume (MPC)and why is it important in predicting consumer behavior?

Accepted Answer

The marginal propensity to consume is th

Question 14

The government component (G)of total output includes goods and services purchased by

Accepted Answer

A)  the federal government plus transfer payments. 
B)  all government institutions plus transfer payments. 
C)  all government institutions. 
D)  all government institutions plus tax revenues. 
A)  the federal government plus transfer payments. 
B)  all government institutions plus transfer payments. 
C)  all government institutions. 
D)  all government institutions plus tax revenues.

Question 15

Aggregate demand is the total demand for the final goods and services produced in an economy.

Accepted Answer

A) True 
 B)False

Question 16

A $500 government bond is a money-fixed asset.

Accepted Answer

A) True 
 B)False

Question 17

National income is

Accepted Answer

A)  the sum of all wages and salaries,interest,rent,and profits in the economy. 
B)  equal to the money value of national output. 
C)  the before-tax income of all individuals in the economy. 
D)  All of the above are correct. 
A)  the sum of all wages and salaries,interest,rent,and profits in the economy. 
B)  equal to the money value of national output. 
C)  the before-tax income of all individuals in the economy. 
D)  All of the above are correct.

Question 18

A movement from one point to an another point on the same consumption function could be caused due to

Accepted Answer

A)  changes in wealth. 
B)  an increase in the general price level. 
C)  decrease in the real interest rates. 
D)  changes in disposable income. 
A)  changes in wealth. 
B)  an increase in the general price level. 
C)  decrease in the real interest rates. 
D)  changes in disposable income.

Question 19

A change in the value of consumer's stock market holdings will cause a shift in the consumption function.

Accepted Answer

A) True 
 B)False

Question 20

Government spending is a leakage out of the circular flow of income and spending.

Accepted Answer

A) True 
 B)False

Among the following,which would not be considered part of the investment component of GDP?

In Macronesia,the MPC is approximately .80.If disposable income changes from 1,000 billion pukas to 1,500 billion pukas,then consumption will change by a(n)

Historical data representing consumption and disposable income reveals that

Disposable income is obtained by

The federal government's principal tool in altering consumer spending is changing

When the price level falls,consumers may feel wealthier and the consumption function will shift upward.

U.S.imports rise when income in the United States increases.

Investment goods are counted in GDP because they are

The majority of payments made by the federal government are for

A decrease in disposable income causes a shift in the consumption function.

Which of the following transactions is included in GDP?

In 1963,government economists assumed that the MPC for the United States was approximately 0.90.If taxes were cut by $9 billion,then consumer expenditures would initially be expected to

What is the marginal propensity to consume (MPC)and why is it important in predicting consumer behavior?

The government component (G)of total output includes goods and services purchased by

Aggregate demand is the total demand for the final goods and services produced in an economy.

A $500 government bond is a money-fixed asset.

National income is

A movement from one point to an another point on the same consumption function could be caused due to

A change in the value of consumer's stock market holdings will cause a shift in the consumption function.

Government spending is a leakage out of the circular flow of income and spending.

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters

Exam 8: Aggregate Demand and The Powerful Consumer

Among the following,which would not be considered part of the investment component of GDP?

In Macronesia,the MPC is approximately .80.If disposable income changes from 1,000 billion pukas to 1,500 billion pukas,then consumption will change by a(n)

Historical data representing consumption and disposable income reveals that

Disposable income is obtained by

The federal government's principal tool in altering consumer spending is changing

When the price level falls,consumers may feel wealthier and the consumption function will shift upward.

U.S.imports rise when income in the United States increases.

Investment goods are counted in GDP because they are

The majority of payments made by the federal government are for

A decrease in disposable income causes a shift in the consumption function.

Which of the following transactions is included in GDP?

In 1963,government economists assumed that the MPC for the United States was approximately 0.90.If taxes were cut by $9 billion,then consumer expenditures would initially be expected to

What is the marginal propensity to consume (MPC)and why is it important in predicting consumer behavior?

The government component (G)of total output includes goods and services purchased by

Aggregate demand is the total demand for the final goods and services produced in an economy.

A $500 government bond is a money-fixed asset.

National income is

A movement from one point to an another point on the same consumption function could be caused due to

A change in the value of consumer's stock market holdings will cause a shift in the consumption function.

Government spending is a leakage out of the circular flow of income and spending.

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand An Initial Look

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters