Question 1

Use the table below to answer the following questions.
Table 27.1.3
  
-Refer to Table 27.1.3. Autonomous consumption is equal to

Accepted Answer

A) $0. 
B) $65. 
C) $100. 
D) $260. 
E) $400. 
A) $0. 
B) $65. 
C) $100. 
D) $260. 
E) $400.

Question 2

Everything else remaining the same, an increase in the marginal propensity to import ________ the slope of the AE curve and ________ equilibrium expenditure.

Accepted Answer

A) decreases; increases 
B) increases; increases 
C) decreases; decreases 
D) increases; decreases 
E) does not change; does not change 
A) decreases; increases 
B) increases; increases 
C) decreases; decreases 
D) increases; decreases 
E) does not change; does not change

Question 3

The marginal propensity to import is equal to

Accepted Answer

A) disposable income minus consumption expenditure minus saving divided by real GDP. 
B) the change in imports divided by the change in real GDP that brought it about, other things remaining the same. 
C) the change in net imports divided by the change in disposable income, other things remaining the same. 
D) imports minus exports. 
E) 1 - MPS - MPC. 
A) disposable income minus consumption expenditure minus saving divided by real GDP. 
B) the change in imports divided by the change in real GDP that brought it about, other things remaining the same. 
C) the change in net imports divided by the change in disposable income, other things remaining the same. 
D) imports minus exports. 
E) 1 - MPS - MPC.

Question 4

Use the figure below to answer the following questions.
   
Figure 27.3.1
The economy shown in the graph does not engage in international trade and has no government. Planned aggregate expenditure equals the sum of consumption expenditure (C)and investment (I).
-Refer to Figure 27.3.1. Autonomous expenditure equals

Accepted Answer

A) $100 billion. 
B) $25 billion. 
C) $50 billion. 
D) $125 billion. 
E) $200 billion. 
A) $100 billion. 
B) $25 billion. 
C) $50 billion. 
D) $125 billion. 
E) $200 billion.

Question 5

Use the table below to answer the following questions.
Table 27.1.2
  
-Refer to Table 27.1.2. Saving equals $100 when disposable income is

Accepted Answer

A) $475. 
B) $550. 
C) $525. 
D) $575. 
E) $625. 
A) $475. 
B) $550. 
C) $525. 
D) $575. 
E) $625.

Question 6

Which of the following events shifts the aggregate expenditure curve and also shifts the aggregate demand curve?
I. a decrease in investment
II. a change in the price level
III. an increase in exports

Accepted Answer

A) I and II 
B) I and III 
C) II and III 
D) I, II, and III 
E) all of the above 
A) I and II 
B) I and III 
C) II and III 
D) I, II, and III 
E) all of the above

Question 7

Suppose that investment increases by $10 billion. Which one of the following would reduce the effect of this increase in autonomous expenditure on equilibrium real GDP in the short run?

Accepted Answer

A) an increase in the marginal propensity to consume 
B) a decrease in the marginal propensity to import 
C) a decrease in the marginal tax rate 
D) a steeper short-run aggregate supply curve 
E) a flatter short-run aggregate supply curve 
A) an increase in the marginal propensity to consume 
B) a decrease in the marginal propensity to import 
C) a decrease in the marginal tax rate 
D) a steeper short-run aggregate supply curve 
E) a flatter short-run aggregate supply curve

Question 8

Use the information below to answer the following questions.
Fact 27.5.1
The economy of Beverly Hills has a consumption function of C = 10 + 0.8Y, investment equal to 6, government expenditure equal to 10, exports equal to 10, and an import function of M = 0.1Y.
-Refer to Fact 27.5.1. What is consumption expenditure in equilibrium in this economy?

Accepted Answer

A) 298 
B) 106 
C) 38.8 
D) 114 
E) none of the above 
A) 298 
B) 106 
C) 38.8 
D) 114 
E) none of the above

Question 9

If there is a decrease in autonomous expenditure, the new AE curve is

Accepted Answer

A) flatter than the original AE curve. 
B) steeper than the original AE curve. 
C) parallel and above the original AE curve. 
D) parallel and below the original AE curve. 
E) downward sloping. 
A) flatter than the original AE curve. 
B) steeper than the original AE curve. 
C) parallel and above the original AE curve. 
D) parallel and below the original AE curve. 
E) downward sloping.

Question 10

Consumption expenditure minus imports, which varies with real GDP, is

Accepted Answer

A) aggregate expenditure. 
B) autonomous expenditure. 
C) planned consumption. 
D) induced expenditure. 
E) unplanned consumption. 
A) aggregate expenditure. 
B) autonomous expenditure. 
C) planned consumption. 
D) induced expenditure. 
E) unplanned consumption.

Question 11

The fraction of a change in disposable income spent on consumption is the

Accepted Answer

A) marginal propensity to consume. 
B) marginal propensity to save. 
C) marginal propensity to dispose. 
D) marginal tax rate. 
E) consumption function. 
A) marginal propensity to consume. 
B) marginal propensity to save. 
C) marginal propensity to dispose. 
D) marginal tax rate. 
E) consumption function.

Use the table below to answer the following questions. Table 27.1.3 -Refer to Table 27.1.3. Autonomous consumption is equal to

Everything else remaining the same, an increase in the marginal propensity to import the slope of the AE curve and equilibrium expenditure.

The marginal propensity to import is equal to

Use the table below to answer the following questions. Table 27.1.2 -Refer to Table 27.1.2. Saving equals $100 when disposable income is

Which of the following events shifts the aggregate expenditure curve and also shifts the aggregate demand curve? I. a decrease in investment II. a change in the price level III. an increase in exports

Suppose that investment increases by $10 billion. Which one of the following would reduce the effect of this increase in autonomous expenditure on equilibrium real GDP in the short run?

If there is a decrease in autonomous expenditure, the new AE curve is

Consumption expenditure minus imports, which varies with real GDP, is

The fraction of a change in disposable income spent on consumption is the

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters

Exam 27: Expenditure Multipliers

Use the table below to answer the following questions. Table 27.1.3 -Refer to Table 27.1.3. Autonomous consumption is equal to

Everything else remaining the same, an increase in the marginal propensity to import ________ the slope of the AE curve and ________ equilibrium expenditure.

The marginal propensity to import is equal to

Use the table below to answer the following questions. Table 27.1.2 -Refer to Table 27.1.2. Saving equals $100 when disposable income is

Which of the following events shifts the aggregate expenditure curve and also shifts the aggregate demand curve? I. a decrease in investment II. a change in the price level III. an increase in exports

Suppose that investment increases by $10 billion. Which one of the following would reduce the effect of this increase in autonomous expenditure on equilibrium real GDP in the short run?

If there is a decrease in autonomous expenditure, the new AE curve is

Consumption expenditure minus imports, which varies with real GDP, is

The fraction of a change in disposable income spent on consumption is the

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters

Everything else remaining the same, an increase in the marginal propensity to import the slope of the AE curve and equilibrium expenditure.