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. Calculate the value of leakages from the economy when the economy is in equilibrium.

A) $770 B) $720 C) $790 D) $600 E) $410 A) $770 B) $720 C) $790 D) $600 E) $410

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. Assume that the economy is at equilibrium in both years. What are net exports for year 2?

A) $60 B) $125 C) $70 D) $55 E) $195 A) $60 B) $125 C) $70 D) $55 E) $195

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, when real GDP is at G:

A) there is pressure for the economy to expand. B) there are unplanned reductions in inventory. C) aggregate expenditures are less than real GDP. D) the economy has achieved macroeconomic equilibrium. E) there is pressure for the economy to contract. A) there is pressure for the economy to expand. B) there are unplanned reductions in inventory. C) aggregate expenditures are less than real GDP. D) the economy has achieved macroeconomic equilibrium. E) there is pressure for the economy to contract.

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. At an income level of $2,100:

A) leakages exceed injections by $800. B) total output exceeds aggregate expenditures by $500. C) injections exceed leakages by $500. D) injections are equal to total output. E) aggregate expenditures exceed total output by $500. A) leakages exceed injections by $800. B) total output exceeds aggregate expenditures by $500. C) injections exceed leakages by $500. D) injections are equal to total output. E) aggregate expenditures exceed total output by $500.

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. If autonomous saving decreases by $200, what will happen at the current equilibrium level of income?

A) Autonomous consumption spending will also decrease by $200, and so no change in equilibrium income occurs. B) Total leakages in the economy will exceed total injections. C) There will be pressure on real GDP to rise. D) There will be pressure on the economy to contract. E) Unplanned inventories in the economy will grow. A) Autonomous consumption spending will also decrease by $200, and so no change in equilibrium income occurs. B) Total leakages in the economy will exceed total injections. C) There will be pressure on real GDP to rise. D) There will be pressure on the economy to contract. E) Unplanned inventories in the economy will grow.

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. Starting at equilibrium level E3 equilibrium level E1 will be reached if aggregate expenditure:

A) decreases by $200. B) increases by $200. C) decreases by $100. D) increases by $100. E) increases by $50. A) decreases by $200. B) increases by $200. C) decreases by $100. D) increases by $100. E) increases by $50.

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 $\begin{array}{l} \begin{array}{|c|c|c|c|c|c|} \hline & \text { Equilibrium } & & & & \\ \hline & \text { Real GDP } & \text { C } & \text { I } & \text { Exports } & \text { Imports } \\ \hline \text { Year 1 } & \$ 9,350 & \$ 7,500 & \$ 1,350 & \$ 1,800 & - \\ \hline \text { Year 2 } & \$ 11,450 & \$ 8,900 & - & \$ 2,350 & \$ 1,600 \\ \hline \end{array}\\ \text { Assume that government spending is zero for this economy. } \end{array}$ -According to the information provided in Table 10.3, the MPI equals _____.

A) +0.12 B) -0.33 C) -0.21 D) +0.14 E) MPS A) +0.12 B) -0.33 C) -0.21 D) +0.14 E) MPS

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 change in investment spending from year 1 to year 2 is:

A) $1,800. B) $450. C) $945. D) $214. E) $2,100. A) $1,800. B) $450. C) $945. D) $214. E) $2,100.

Exam 10: Income and Expenditures Equilibrium

Assume that the marginal propensity to consume equals 0.75 and the marginal propensity to import equals 0.10. By how much does spending on domestic goods increase if income increases by $300?

(Multiple Choice)

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Question 101

Suppose an economy operates at a real GDP level of $855, where saving = $400; investment = $95; government spending = $365; taxes = $130; imports = $210; exports = $170. Which of the following statements is true in the light of the given information?

(Multiple Choice)

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Question 102

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. Calculate the value of leakages from the economy when the economy is in equilibrium.

(Multiple Choice)

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Question 103

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. Assume that the economy is at equilibrium in both years. What are net exports for year 2?

(Multiple Choice)

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Question 104

The aggregate demand curve depicts a negative relationship between real GDP and the general price level.

(True/False)

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Question 105

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, when real GDP is at G:

(Multiple Choice)

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Question 106

If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then _____ to reach the potential real GDP level.

(Multiple Choice)

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Question 107

An increase in U.S. imports from Mexico will cause a decrease in income for Mexican individuals and businesses.

(True/False)

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Question 108

Assume that an economy is in equilibrium with a budget deficit of $130 billion, positive net exports of $453 billion, and a saving level of $1,550 billion. If taxes are zero, then planned investment spending must be equal to:

(Multiple Choice)

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Question 109

The figure given below shows the macroeconomic equilibrium of a country. Figure 10.7 -Refer to Figure 10.7. What is the size of the GDP gap if potential GDP equals $3,000?

(Multiple Choice)

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Question 110

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. At an income level of $2,100:

(Multiple Choice)

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Question 111

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. Suppose that I+G+EX equals $20 and the economy is in equilibrium. What is the amount of saving when T = $0 and M = $5 at the equilibrium level?

(Multiple Choice)

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Question 112

A decrease in the general price level is associated with an upward shift in the aggregate expenditures function.

(True/False)

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Question 113

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. If autonomous saving decreases by $200, what will happen at the current equilibrium level of income?

(Multiple Choice)

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Question 114

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. What is the marginal propensity to save for this economy?

(Multiple Choice)

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Question 115

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. Starting at equilibrium level E3 equilibrium level E1 will be reached if aggregate expenditure:

(Multiple Choice)

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Question 116

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 -In Figure 10.4, calculate the marginal propensity to consume.

(Multiple Choice)

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Question 117

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. -According to the information provided in Table 10.3, the MPI equals _____.

(Multiple Choice)

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Question 118

Suppose an appreciation of the French franc causes U.S. prices of French wine imports to rise sharply. On the other hand, Californian wine becomes relatively inexpensive to French consumers. Other things equal, this will result in:

(Multiple Choice)

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Question 119

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 change in investment spending from year 1 to year 2 is:

(Multiple Choice)

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Question 120

Assume that the marginal propensity to consume equals 0.75 and the marginal propensity to import equals 0.10. By how much does spending on domestic goods increase if income increases by $300?

Suppose an economy operates at a real GDP level of $855, where saving = $400; investment = $95; government spending = $365; taxes = $130; imports = $210; exports = $170. Which of the following statements is true in the light of the given information?

The aggregate demand curve depicts a negative relationship between real GDP and the general price level.

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, when real GDP is at G:

If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then _____ to reach the potential real GDP level.

An increase in U.S. imports from Mexico will cause a decrease in income for Mexican individuals and businesses.

Assume that an economy is in equilibrium with a budget deficit of $130 billion, positive net exports of $453 billion, and a saving level of $1,550 billion. If taxes are zero, then planned investment spending must be equal to:

The figure given below shows the macroeconomic equilibrium of a country. Figure 10.7 -Refer to Figure 10.7. What is the size of the GDP gap if potential GDP equals $3,000?

A decrease in the general price level is associated with an upward shift in the aggregate expenditures function.

Suppose an appreciation of the French franc causes U.S. prices of French wine imports to rise sharply. On the other hand, Californian wine becomes relatively inexpensive to French consumers. Other things equal, this will result in:

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

Exam 10: Income and Expenditures Equilibrium

Assume that the marginal propensity to consume equals 0.75 and the marginal propensity to import equals 0.10. By how much does spending on domestic goods increase if income increases by $300?

Suppose an economy operates at a real GDP level of $855, where saving = $400; investment = $95; government spending = $365; taxes = $130; imports = $210; exports = $170. Which of the following statements is true in the light of the given information?

The aggregate demand curve depicts a negative relationship between real GDP and the general price level.

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, when real GDP is at G:

If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then _____ to reach the potential real GDP level.

An increase in U.S. imports from Mexico will cause a decrease in income for Mexican individuals and businesses.

Assume that an economy is in equilibrium with a budget deficit of $130 billion, positive net exports of $453 billion, and a saving level of $1,550 billion. If taxes are zero, then planned investment spending must be equal to:

The figure given below shows the macroeconomic equilibrium of a country. Figure 10.7 -Refer to Figure 10.7. What is the size of the GDP gap if potential GDP equals $3,000?

A decrease in the general price level is associated with an upward shift in the aggregate expenditures function.

Suppose an appreciation of the French franc causes U.S. prices of French wine imports to rise sharply. On the other hand, Californian wine becomes relatively inexpensive to French consumers. Other things equal, this will result in:

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 -According to Figure 10.1, when real GDP is at G: