Question 1

Figure 8-1
  
-Given the scatter diagram in Figure 8-1,what is the MPC (your best estimate)?

Accepted Answer

A)  1/2 
B)  1/3 
C)  2/3 
D)  1 
A)  1/2 
B)  1/3 
C)  2/3 
D)  1

Question 2

If inflation rises more quickly in the United States than in France,U.S.exports to France should rise.

Accepted Answer

A) True 
 B)False

Question 3

The national income accounts include a value for the amount of capital stock "used up" during the production of current output.This dollar amount is called

Accepted Answer

A)  appreciation. 
B)  dollarization. 
C)  amortization. 
D)  depreciation. 
A)  appreciation. 
B)  dollarization. 
C)  amortization. 
D)  depreciation.

Question 4

National income minus personal taxes net of transfer payments equals disposable income.

Accepted Answer

A) True 
 B)False

Question 5

If U.S.consumers become more optimistic about their future income and wealth,the consumption function will shift upward.

Accepted Answer

A) True 
 B)False

Question 6

GDP can be calculated as the final demand for goods and services by consumers,businesses,

Accepted Answer

A)  and governments. 
B)  and foreigners. 
C)  governments, and foreigners. 
D)  governments, and financial institutions. 
A)  and governments. 
B)  and foreigners. 
C)  governments, and foreigners. 
D)  governments, and financial institutions.

Question 7

Tax reductions should also reduce the amount of consumer expenditures.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following methods could be used to calculate GDP?

Accepted Answer

A)  the sum of all spending on final goods and services 
B)  the sum of all factor payments plus depreciation and indirect business taxes 
C)  the sum of all values added at each stage of production 
D)  All of the above could be used. 
A)  the sum of all spending on final goods and services 
B)  the sum of all factor payments plus depreciation and indirect business taxes 
C)  the sum of all values added at each stage of production 
D)  All of the above could be used.

Question 9

For each of the following,how would they be included in the national income accounts?
a.The University of California buys a new computer.
b.Charles buys a new MP3 player.
c.Marian buys a new mountain cabin.
d.Vikki buys an old mansion with hopes of restoring it.
e.Farmer Brown buys a used combine harvester.

Accepted Answer

a.Government purchases.Purchased by a st

Question 10

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 11

Assume that consumption in the United States is $9,000 billion in 2009.If the MPC is 0.8 and disposable income increases by $1,000 billion in 2010,then the level of consumption in 2010 will be

Accepted Answer

A)  $10,000 billion. 
B)  $9,800 billion. 
C)  $9,000 billion. 
D)  $7,200 billion. 
A)  $10,000 billion. 
B)  $9,800 billion. 
C)  $9,000 billion. 
D)  $7,200 billion.

Question 12

The marginal propensity to consume (MPC)is calculated by which formula?

Accepted Answer

A)  MPC = change in DI divided by change in C 
B)  MPC = change in GDP divided by change in DI 
C)  MPC = change in C divided by change in DI 
D)  MPC = change in C divided by change in GDP 
A)  MPC = change in DI divided by change in C 
B)  MPC = change in GDP divided by change in DI 
C)  MPC = change in C divided by change in DI 
D)  MPC = change in C divided by change in GDP

Question 13

Households can finance their consumer spending from current

Accepted Answer

A)  income. 
B)  wealth. 
C)  debt. 
D)  income and current wealth. 
A)  income. 
B)  wealth. 
C)  debt. 
D)  income and current wealth.

Question 14

Which of the following would cause an upward shift in the consumption function?

Accepted Answer

A)  a stock market crash 
B)  an increase in the price level 
C)  a decrease in disposable income 
D)  a decrease in the price level 
A)  a stock market crash 
B)  an increase in the price level 
C)  a decrease in disposable income 
D)  a decrease in the price level

Question 15

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 16

Government-produced goods are added to GDP at

Accepted Answer

A)  their market value. 
B)  the value they have to their users. 
C)  the value of the inputs used to produce them. 
D)  the value Congress places on them. 
A)  their market value. 
B)  the value they have to their users. 
C)  the value of the inputs used to produce them. 
D)  the value Congress places on them.

Question 17

If the stock market falls by 25 percent next year and remains down,what is most likely to happen to the consumption function?

Accepted Answer

A)  It will shift upward. 
B)  It will shift downward. 
C)  It will not shift, but people will move downward along the consumption function. 
D)  It will not shift, but people will move upward along the consumption function. 
A)  It will shift upward. 
B)  It will shift downward. 
C)  It will not shift, but people will move downward along the consumption function. 
D)  It will not shift, but people will move upward along the consumption function.

Question 18

An example of investment is the purchase of machinery by a manufacturing company.

Accepted Answer

A) True 
 B)False

Question 19

The main reason that the 1975,2008,and 2009 tax cuts did not have a large effect on GDP is that they were

Accepted Answer

A)  temporary surcharges rather than permanent surcharges. 
B)  permanent surcharges rather than temporary surcharges. 
C)  temporary tax cuts rather than a permanent tax cuts. 
D)  permanent tax cuts rather than a temporary tax cuts. 
A)  temporary surcharges rather than permanent surcharges. 
B)  permanent surcharges rather than temporary surcharges. 
C)  temporary tax cuts rather than a permanent tax cuts. 
D)  permanent tax cuts rather than a temporary tax cuts.

Question 20

In economic analysis,which of the following is considered an injection?

Accepted Answer

A)  saving 
B)  taxes 
C)  imports 
D)  exports 
A)  saving 
B)  taxes 
C)  imports 
D)  exports

Figure 8-1 -Given the scatter diagram in Figure 8-1,what is the MPC (your best estimate)?

If inflation rises more quickly in the United States than in France,U.S.exports to France should rise.

The national income accounts include a value for the amount of capital stock "used up" during the production of current output.This dollar amount is called

National income minus personal taxes net of transfer payments equals disposable income.

If U.S.consumers become more optimistic about their future income and wealth,the consumption function will shift upward.

GDP can be calculated as the final demand for goods and services by consumers,businesses,

Tax reductions should also reduce the amount of consumer expenditures.

Which of the following methods could be used to calculate GDP?

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

Assume that consumption in the United States is $9,000 billion in 2009.If the MPC is 0.8 and disposable income increases by $1,000 billion in 2010,then the level of consumption in 2010 will be

The marginal propensity to consume (MPC)is calculated by which formula?

Households can finance their consumer spending from current

Which of the following would cause an upward shift in the consumption function?

National income is

Government-produced goods are added to GDP at

If the stock market falls by 25 percent next year and remains down,what is most likely to happen to the consumption function?

An example of investment is the purchase of machinery by a manufacturing company.

The main reason that the 1975,2008,and 2009 tax cuts did not have a large effect on GDP is that they were

In economic analysis,which of the following is considered an injection?

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

Figure 8-1 -Given the scatter diagram in Figure 8-1,what is the MPC (your best estimate)?

If inflation rises more quickly in the United States than in France,U.S.exports to France should rise.

The national income accounts include a value for the amount of capital stock "used up" during the production of current output.This dollar amount is called

National income minus personal taxes net of transfer payments equals disposable income.

If U.S.consumers become more optimistic about their future income and wealth,the consumption function will shift upward.

GDP can be calculated as the final demand for goods and services by consumers,businesses,

Tax reductions should also reduce the amount of consumer expenditures.

Which of the following methods could be used to calculate GDP?

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

Assume that consumption in the United States is $9,000 billion in 2009.If the MPC is 0.8 and disposable income increases by $1,000 billion in 2010,then the level of consumption in 2010 will be

The marginal propensity to consume (MPC)is calculated by which formula?

Households can finance their consumer spending from current

Which of the following would cause an upward shift in the consumption function?

National income is

Government-produced goods are added to GDP at

If the stock market falls by 25 percent next year and remains down,what is most likely to happen to the consumption function?

An example of investment is the purchase of machinery by a manufacturing company.

The main reason that the 1975,2008,and 2009 tax cuts did not have a large effect on GDP is that they were

In economic analysis,which of the following is considered an injection?

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