The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 $\begin{array}{|c|c|c|c|c|c|c|} \hline & \text { GDP } & \boldsymbol{C} & \boldsymbol{I} & \mathbf{G} & \text { Export } & \text { Import } \\ \hline \text { Year 1 } & - & \$ 750 & \$ 110 & \$ 60 & \$ 70 & \$ 50 \\ \hline \text { Year 2 } & \$ 1,150 & \$ 930 & \$ 90 & \$ 75 & \$ 125 & - \\ \hline \end{array}$ -Refer to Table 10.1. If real GDP equals $1,000 in year 1, then:

A) unplanned inventory investment is zero. B) unplanned inventories increase by $50. C) inventories decrease by $100. D) inventories increase by $60. E) real GDP is less than aggregate expenditure. A) unplanned inventory investment is zero. B) unplanned inventories increase by $50. C) inventories decrease by $100. D) inventories increase by $60. E) real GDP is less than aggregate expenditure. D

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: CS1U1B11S1U1B0: Consumption IS1U1B11S1U1B0: Investment GS1U1B11S1U1B0: Government spending XS1U1B11S1U1B0: Net Exports -Consider the economy described in Figure 10.1. Which of the following is true if the real GDP is equal to 0H?

A) Aggregate expenditures are greater than total income. B) All economic resources are being used efficiently. C) Households are dissaving an amount equal to DC. D) Businesses accumulate unwanted inventories. E) Unplanned investment will decline. A) Aggregate expenditures are greater than total income. B) All economic resources are being used efficiently. C) Households are dissaving an amount equal to DC. D) Businesses accumulate unwanted inventories. E) Unplanned investment will decline. D

The table given below shows the levels of national income (Y) and the corresponding levels of saving (S), investment (I), export (X), and import (M) of an open economy. Table 10.2 $\begin{array}{l} \begin{array}{|c|c|c|c|c|c|} \hline \boldsymbol{Y} & \boldsymbol{S} & \boldsymbol{I} & \boldsymbol{G} & \boldsymbol{X} & \boldsymbol{M} \\ \hline \$ 935 & -\$ 250 & \$ 320 & \$ 40 & \$ 170 & \$ 100 \\ \$ 2,100 & \$ 0 & \$ 320 & \$ 140 & \$ 170 & \$ 130 \\ \$ 3,320 & \$ 250 & \$ 320 & \$ 200 & \$ 200 & \$ 350 \\ \$ 4,800 & \$ 375 & \$ 320 & \$ 240 & \$ 230 & \$ 415 \\ \$ 5,230 & \$ 650 & \$ 320 & \$ 320 & \$ 250 & \$ 590 \\ \$ 6,300 & \$ 825 & \$ 320 & \$ 340 & \$ 270 & \$ 610 \\ \hline \end{array}\\ \text { Taxes equal zero } \end{array}$ -Consider the economy described in Table 10.2. What is the equilibrium level of real GDP?

A) $935 B) $2,100 C) $3,320 D) $4,800 E) $5,230 A) $935 B) $2,100 C) $3,320 D) $4,800 E) $5,230

The table given below shows the real GDP, aggregate expenditures, saving, and imports of an economy. Table 10.4 $\begin{array}{|c|c|c|c|} \hline \text { Real GDP } & \begin{array}{c} \text { Aggregate } \\ \text { Expenditures } \end{array} & \text { Saving } & \text { Imports } \\ \hline \$ 0 & \$ 800 & -\$ 300 & \$ 50 \\ \$ 1,000 & \$ 1,600 & -\$ 200 & \$ 150 \\ \$ 2,000 & \$ 2,400 & -\$ 100 & \$ 250 \\ \$ 3,000 & \$ 3,200 & \$ 0 & \$ 350 \\ \$ 4,000 & \$ 4,000 & \$ 100 & \$ 450 \\ \$ 5,000 & \$ 4,800 & \$ 200 & \$ 550 \\ \$ 6,000 & \$ 5,600 & \$ 300 & \$ 650 \\ \hline \end{array}$ -Refer to Table 10.4. Suppose the economy is currently in equilibrium and the potential GDP of the economy is $6,000. The current GDP gap equals _____.

A) $400 B) $1,000 C) $2,000 D) $3,000 E) $6,000 A) $400 B) $1,000 C) $2,000 D) $3,000 E) $6,000

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: CS1U1B11S1U1B0: Consumption IS1U1B11S1U1B0: Investment GS1U1B11S1U1B0: Government spending XS1U1B11S1U1B0: Net Exports -According to Figure 10.1, the economy will expand when aggregate expenditures are at:

A) point D. B) point A. C) point B. D) point C. E) point E. A) point D. B) point A. C) point B. D) point C. E) point E.

The table given below reports the value of real GDP and its components consumption (C), investment (I), exports, and imports for two consecutive years. Table 10.3 $\begin{array}{l} \begin{array}{|c|c|c|c|c|c|} \hline & \text { Equilibrium } & & & & \\ \hline & \text { Real GDP } & \text { C } & \text { I } & \text { Exports } & \text { Imports } \\ \hline \text { Year 1 } & \$ 9,350 & \$ 7,500 & \$ 1,350 & \$ 1,800 & - \\ \hline \text { Year 2 } & \$ 11,450 & \$ 8,900 & - & \$ 2,350 & \$ 1,600 \\ \hline \end{array}\\ \text { Assume that government spending is zero for this economy. } \end{array}$ -Refer to Table 10.3. The equilibrium value of imports in year 1 is:

A) $1,600 B) $1,450. C) $1,400. D) $1,300. E) $1,200. A) $1,600 B) $1,450. C) $1,400. D) $1,300. E) $1,200.

The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 $\begin{array}{|c|c|c|c|c|c|c|} \hline & \text { GDP } & \boldsymbol{C} & \boldsymbol{I} & \mathbf{G} & \text { Export } & \text { Import } \\ \hline \text { Year 1 } & - & \$ 750 & \$ 110 & \$ 60 & \$ 70 & \$ 50 \\ \hline \text { Year 2 } & \$ 1,150 & \$ 930 & \$ 90 & \$ 75 & \$ 125 & - \\ \hline \end{array}$ -Refer to Table 10.1. What is the equilibrium level of real GDP in year 1?

A) $940 B) $1,040 C) $1,100 D) $1,050 E) $920 A) $940 B) $1,040 C) $1,100 D) $1,050 E) $920

The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework. Assume that MPI is equal to zero. Figure 10.4 In the figure: C: Consumption IS1U1B11S1U1B0 and IS1U1B12S1U1B0: Investment G: Government Spending X: Exports -Refer to Figure 10.4. Compute the increase in investment spending from I1 to I2.

A) $600. B) $100. C) $200. D) $400. E) $300. A) $600. B) $100. C) $200. D) $400. E) $300.

The table given below reports the value of real GDP and its components consumption (C), investment (I), exports, and imports for two consecutive years. Table 10.3 $\begin{array}{l} \begin{array}{|c|c|c|c|c|c|} \hline & \text { Equilibrium } & & & & \\ \hline & \text { Real GDP } & \text { C } & \text { I } & \text { Exports } & \text { Imports } \\ \hline \text { Year 1 } & \$ 9,350 & \$ 7,500 & \$ 1,350 & \$ 1,800 & - \\ \hline \text { Year 2 } & \$ 11,450 & \$ 8,900 & - & \$ 2,350 & \$ 1,600 \\ \hline \end{array}\\ \text { Assume that government spending is zero for this economy. } \end{array}$ -Refer to Table 10.3. What will be the value of the spending multiplier?

A) 1 B) 0.47 C) 5 D) 1.25 E) 2.13 A) 1 B) 0.47 C) 5 D) 1.25 E) 2.13

Exam 10: Income and Expenditures Equilibrium

The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 GDP Export Import Year 1 - \ 750 \ 110 \ 60 \ 70 \ 50 Year 2 \ 1,150 \ 930 \ 90 \ 75 \ 125 - -Refer to Table 10.1. If real GDP equals $1,000 in year 1, then:

Free

(Multiple Choice)

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(80)

Question 1

Correct Answer:

Verified

D

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C₁: Consumption I₁: Investment G₁: Government spending X₁: Net Exports -Consider the economy described in Figure 10.1. Which of the following is true if the real GDP is equal to 0H?

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

D

Given a constant GDP gap, the higher the spending multiplier, the smaller will be the recessionary gap.

Free

(True/False)

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Question 3

Correct Answer:

Verified

True

The table given below shows the levels of national income (Y) and the corresponding levels of saving (S), investment (I), export (X), and import (M) of an open economy. Table 10.2 \ 935 -\ 250 \ 320 \ 40 \ 170 \ 100 \ 2,100 \ 0 \ 320 \ 140 \ 170 \ 130 \ 3,320 \ 250 \ 320 \ 200 \ 200 \ 350 \ 4,800 \ 375 \ 320 \ 240 \ 230 \ 415 \ 5,230 \ 650 \ 320 \ 320 \ 250 \ 590 \ 6,300 \ 825 \ 320 \ 340 \ 270 \ 610 Taxes equal zero -Consider the economy described in Table 10.2. What is the equilibrium level of real GDP?

(Multiple Choice)

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Question 4

Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent. The spending multiplier for this economy is equal to _____.

(Multiple Choice)

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Question 5

Scenario 10.1 Imagine an economy that does not have international trade and is originally in equilibrium. Then the government increases the level of spending by $350 million because it received a gift from abroad. In this economy, only 65 cents of every dollar is spent, and the rest is saved. -Refer to Scenario 10.1. Calculate the value of the spending multiplier.

(Multiple Choice)

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Question 6

When the aggregate expenditures function of a closed economy is plotted against real GDP, any point on the 45-degree line represents C + I + G = Y, where C = Consumption, I = Investment, G = Government spending, and Y = Real GDP.

(True/False)

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Question 7

Suppose equilibrium income decreases by $600 as a result of a change in government spending. If the multiplier is 3, what is the change in government spending?

(Multiple Choice)

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Question 8

The table given below shows the real GDP, aggregate expenditures, saving, and imports of an economy. Table 10.4 Real GDP Aggregate Expenditures Saving Imports \ 0 \ 800 -\ 300 \ 50 \ 1,000 \ 1,600 -\ 200 \ 150 \ 2,000 \ 2,400 -\ 100 \ 250 \ 3,000 \ 3,200 \ 0 \ 350 \ 4,000 \ 4,000 \ 100 \ 450 \ 5,000 \ 4,800 \ 200 \ 550 \ 6,000 \ 5,600 \ 300 \ 650 -Refer to Table 10.4. Suppose the economy is currently in equilibrium and the potential GDP of the economy is $6,000. The current GDP gap equals _____.

(Multiple Choice)

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Question 9

Suppose an economy has a government budget surplus of $100, net exports of -$400, and a planned investment level of $1,000. For this economy to be in equilibrium, saving must equal:

(Multiple Choice)

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Question 10

Which of the following can be considered an injection that can offset leakages in an economy and help it attain equilibrium?

(Multiple Choice)

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Question 11

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C₁: Consumption I₁: Investment G₁: Government spending X₁: Net Exports -According to Figure 10.1, the economy will expand when aggregate expenditures are at:

(Multiple Choice)

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Question 12

The figure given below represents the leakages and injections in an economy. Figure 10.2 In the figure: I, I1: Investment; G: Government spending; EX, EX1: Exports; T: Taxes; and M: Imports. -Refer to Figure 10.2. A decline in total injections by $10:

(Multiple Choice)

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Question 13

The table given below reports the value of real GDP and its components consumption (C), investment (I), exports, and imports for two consecutive years. Table 10.3 Equilibrium Real GDP C I Exports Imports Year 1 \ 9,350 \ 7,500 \ 1,350 \ 1,800 - Year 2 \ 11,450 \ 8,900 - \ 2,350 \ 1,600 Assume that government spending is zero for this economy. -Refer to Table 10.3. The equilibrium value of imports in year 1 is:

(Multiple Choice)

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Question 14

The multiplier effect of a change in foreign autonomous expenditures in the U.S.:

(Multiple Choice)

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Question 15

Consider an economy that is in equilibrium with real GDP = $5,000, MPS = 1/4 and MPI = 1/5. What will be the new equilibrium level of income if planned investment spending increases by $500?

(Multiple Choice)

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Question 16

The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 GDP Export Import Year 1 - \ 750 \ 110 \ 60 \ 70 \ 50 Year 2 \ 1,150 \ 930 \ 90 \ 75 \ 125 - -Refer to Table 10.1. What is the equilibrium level of real GDP in year 1?

(Multiple Choice)

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Question 17

The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework. Assume that MPI is equal to zero. Figure 10.4 In the figure: C: Consumption I₁ and I₂: Investment G: Government Spending X: Exports -Refer to Figure 10.4. Compute the increase in investment spending from I1 to I2.

(Multiple Choice)

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Question 18

In an economy that has no foreign trade, if real GDP declines by $160 million following a decline in investment spending of $40 million, then the marginal propensity to consume must be equal to _____.

(Multiple Choice)

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Question 19

The table given below reports the value of real GDP and its components consumption (C), investment (I), exports, and imports for two consecutive years. Table 10.3 Equilibrium Real GDP C I Exports Imports Year 1 \ 9,350 \ 7,500 \ 1,350 \ 1,800 - Year 2 \ 11,450 \ 8,900 - \ 2,350 \ 1,600 Assume that government spending is zero for this economy. -Refer to Table 10.3. What will be the value of the spending multiplier?

(Multiple Choice)

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Question 20

The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 GDP Export Import Year 1 - \ 750 \ 110 \ 60 \ 70 \ 50 Year 2 \ 1,150 \ 930 \ 90 \ 75 \ 125 - -Refer to Table 10.1. If real GDP equals $1,000 in year 1, then:

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C₁: Consumption I₁: Investment G₁: Government spending X₁: Net Exports -Consider the economy described in Figure 10.1. Which of the following is true if the real GDP is equal to 0H?

Given a constant GDP gap, the higher the spending multiplier, the smaller will be the recessionary gap.

Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent. The spending multiplier for this economy is equal to _____.

When the aggregate expenditures function of a closed economy is plotted against real GDP, any point on the 45-degree line represents C + I + G = Y, where C = Consumption, I = Investment, G = Government spending, and Y = Real GDP.

Suppose equilibrium income decreases by $600 as a result of a change in government spending. If the multiplier is 3, what is the change in government spending?

Suppose an economy has a government budget surplus of $100, net exports of -$400, and a planned investment level of $1,000. For this economy to be in equilibrium, saving must equal:

Which of the following can be considered an injection that can offset leakages in an economy and help it attain equilibrium?

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C₁: Consumption I₁: Investment G₁: Government spending X₁: Net Exports -According to Figure 10.1, the economy will expand when aggregate expenditures are at:

The figure given below represents the leakages and injections in an economy. Figure 10.2 In the figure: I, I1: Investment; G: Government spending; EX, EX1: Exports; T: Taxes; and M: Imports. -Refer to Figure 10.2. A decline in total injections by $10:

The multiplier effect of a change in foreign autonomous expenditures in the U.S.:

Consider an economy that is in equilibrium with real GDP = $5,000, MPS = 1/4 and MPI = 1/5. What will be the new equilibrium level of income if planned investment spending increases by $500?

The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 GDP Export Import Year 1 - \ 750 \ 110 \ 60 \ 70 \ 50 Year 2 \ 1,150 \ 930 \ 90 \ 75 \ 125 - -Refer to Table 10.1. What is the equilibrium level of real GDP in year 1?

In an economy that has no foreign trade, if real GDP declines by $160 million following a decline in investment spending of $40 million, then the marginal propensity to consume must be equal to _____.

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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Exam 10: Income and Expenditures Equilibrium

The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 GDP Export Import Year 1 - \ 750 \ 110 \ 60 \ 70 \ 50 Year 2 \ 1,150 \ 930 \ 90 \ 75 \ 125 - -Refer to Table 10.1. If real GDP equals $1,000 in year 1, then:

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C1: Consumption I1: Investment G1: Government spending X1: Net Exports -Consider the economy described in Figure 10.1. Which of the following is true if the real GDP is equal to 0H?

Given a constant GDP gap, the higher the spending multiplier, the smaller will be the recessionary gap.

Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent. The spending multiplier for this economy is equal to _____.

When the aggregate expenditures function of a closed economy is plotted against real GDP, any point on the 45-degree line represents C + I + G = Y, where C = Consumption, I = Investment, G = Government spending, and Y = Real GDP.

Suppose equilibrium income decreases by $600 as a result of a change in government spending. If the multiplier is 3, what is the change in government spending?

Suppose an economy has a government budget surplus of $100, net exports of -$400, and a planned investment level of $1,000. For this economy to be in equilibrium, saving must equal:

Which of the following can be considered an injection that can offset leakages in an economy and help it attain equilibrium?

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C1: Consumption I1: Investment G1: Government spending X1: Net Exports -According to Figure 10.1, the economy will expand when aggregate expenditures are at:

The figure given below represents the leakages and injections in an economy. Figure 10.2 In the figure: I, I1: Investment; G: Government spending; EX, EX1: Exports; T: Taxes; and M: Imports. -Refer to Figure 10.2. A decline in total injections by $10:

The multiplier effect of a change in foreign autonomous expenditures in the U.S.:

Consider an economy that is in equilibrium with real GDP = $5,000, MPS = 1/4 and MPI = 1/5. What will be the new equilibrium level of income if planned investment spending increases by $500?

The table given below states the value of the GDP and the different components of aggregate expenditure for two years. Table 10.1 GDP Export Import Year 1 - \ 750 \ 110 \ 60 \ 70 \ 50 Year 2 \ 1,150 \ 930 \ 90 \ 75 \ 125 - -Refer to Table 10.1. What is the equilibrium level of real GDP in year 1?

In an economy that has no foreign trade, if real GDP declines by $160 million following a decline in investment spending of $40 million, then the marginal propensity to consume must be equal to _____.

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C₁: Consumption I₁: Investment G₁: Government spending X₁: Net Exports -Consider the economy described in Figure 10.1. Which of the following is true if the real GDP is equal to 0H?

The figure given below shows the aggregate expenditure curve of an open economy. Figure 10.1 In the figure: C₁: Consumption I₁: Investment G₁: Government spending X₁: Net Exports -According to Figure 10.1, the economy will expand when aggregate expenditures are at: