Question 1

-In the figure above,the marginal propensity to consume is

Accepted Answer

A)  3.00. 
B)  1.00. 
C)  0.67. 
D)  0.25. 
A)  3.00. 
B)  1.00. 
C)  0.67. 
D)  0.25.

Question 2

When prices are fixed and there are no imports or income taxes,the value of the multiplier is

Accepted Answer

A)  less than one. 
B)  greater than one. 
C)  equal to one. 
D)  equal to zero. 
A)  less than one. 
B)  greater than one. 
C)  equal to one. 
D)  equal to zero.

Question 3

A change in the real interest rate creates a movement along the consumption function.

Accepted Answer

A) True 
 B)False

Question 4

-The figure above illustrates an economy's consumption function.What is the marginal propensity to consume in this economy?

Accepted Answer

A)  0.67 
B)  1.00 
C)  0.75 
D)  0.33 
A)  0.67 
B)  1.00 
C)  0.75 
D)  0.33

Question 5

-In the figure above,negative saving occurs

Accepted Answer

A)  at all levels of disposable income. 
B)  when disposable income is $8 trillion. 
C)  when disposable income is $12 trillion. 
D)  when disposable income is $16 trillion. 
A)  at all levels of disposable income. 
B)  when disposable income is $8 trillion. 
C)  when disposable income is $12 trillion. 
D)  when disposable income is $16 trillion.

Question 6

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Real GDP } \
\text { (trillions of 2005 } \
\text { dollars) }
\end{array} & \begin{array} { c } 
\text { Aggregate } \
\text { expenditure (trillions } \
\text { of 2005 dollars) }
\end{array} \
\hline 0 & 0.3 \
\hline 1.0 & 1.2 \
\hline 2.0 & 2.1 \
\hline 3.0 & 3.0 \
\hline 4.0 & 3.9 \
\hline 5.0 & 4.8 \
\hline
\end{array}$$
-In the above table,equilibrium expenditure is

Accepted Answer

A)  $0.3 trillion. 
B)  $3.0 trillion. 
C)  $4.8 trillion. 
D)  None of the above answers are correct. 
A)  $0.3 trillion. 
B)  $3.0 trillion. 
C)  $4.8 trillion. 
D)  None of the above answers are correct.

Question 7

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Disposable income } \
\text { (billions of dollars) }
\end{array} & \begin{array} { c } 
\text { Consumption expenditure } \
\text { (billions of dollars) }
\end{array} \
\hline 400 & 450 \
\hline 600 & 600 \
\hline 800 & 750 \
\hline 1000 & 900 \
\hline 1200 & 1050 \
\hline
\end{array}$$
-Based upon the above table,saving equals $100 billion when disposable income equals

Accepted Answer

A)  $800 billion. 
B)  $1000 billion. 
C)  $1200 billion. 
D)  some amount but we need more information to calculate the amount. 
A)  $800 billion. 
B)  $1000 billion. 
C)  $1200 billion. 
D)  some amount but we need more information to calculate the amount.

Question 8

"Similar to imports,U.S.exports depend on the level of U.S.real GDP so that if real GDP increases,U.S.exports increase." Explain whether the previous sentence is correct or incorrect.

Accepted Answer

The sentence is incorrect along two dime

Question 9

-In the above figure,consumption and disposable income are equal at

Accepted Answer

A)  any point along the consumption function. 
B)  a saving level of $1 trillion and disposable income level of $4 trillion. 
C)  a disposable income level of $0. 
D)  a disposable income level of $2 trillion. 
A)  any point along the consumption function. 
B)  a saving level of $1 trillion and disposable income level of $4 trillion. 
C)  a disposable income level of $0. 
D)  a disposable income level of $2 trillion.

Question 10

$$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Real GDP } \
\text { (trillions of 2005 } \
\text { dollars) }
\end{array} & \begin{array} { c } 
\text { Aggregate } \
\text { expenditure (trillions } \
\text { of 2005 dollars) }
\end{array} \
\hline 0 & 0.3 \
\hline 1.0 & 1.2 \
\hline 2.0 & 2.1 \
\hline 3.0 & 3.0 \
\hline 4.0 & 3.9 \
\hline 5.0 & 4.8 \
\hline
\end{array}$$
-The data in the above table indicate that autonomous expenditure is

Accepted Answer

A)  $0.3 trillion. 
B)  $3.0 trillion. 
C)  $4.8 trillion. 
D)  None of the above answers is correct. 
A)  $0.3 trillion. 
B)  $3.0 trillion. 
C)  $4.8 trillion. 
D)  None of the above answers is correct.

Question 11

-In the figure above,autonomous consumption is

Accepted Answer

A)  zero. 
B)  $2 trillion. 
C)  $4 trillion. 
D)  $6 trillion. 
A)  zero. 
B)  $2 trillion. 
C)  $4 trillion. 
D)  $6 trillion.

Question 12

An increase in expected future income ________.

Accepted Answer

A)  decreases consumption expenditure 
B)  increases saving 
C)  shifts the consumption function upward 
D)  shifts the saving function upward 
A)  decreases consumption expenditure 
B)  increases saving 
C)  shifts the consumption function upward 
D)  shifts the saving function upward

Question 13

Suppose the economy has no income taxes or imports.How is the size of the expenditure multiplier related to the marginal propensity to consume?
What is the multiplier if the MPC equals 0.25?
If the MPC equals 0.50?
If the MPC equals 0.90?

Accepted Answer

The multiplier equals @#LAT-DLM&, so the larger th

Question 14

What is the relationship between U.S.real GDP and U.S.imports?

Accepted Answer

When U.S.real GDP increases,so

Question 15

Equilibrium expenditure occurs where the aggregate expenditure curve crosses the

Accepted Answer

A)  45-degree line. 
B)  horizontal axis. 
C)  vertical axis. 
D)  consumption function. 
A)  45-degree line. 
B)  horizontal axis. 
C)  vertical axis. 
D)  consumption function.

Question 16

Suppose the equilibrium level of expenditure is $13 trillion.If real GDP is $12 trillion,then inventories are ________ their target levels and real GDP will ________.

Accepted Answer

A)  above; increase 
B)  above; decrease 
C)  below; increase 
D)  below; decrease 
A)  above; increase 
B)  above; decrease 
C)  below; increase 
D)  below; decrease

Question 17

If the multiplier for a change in autonomous expenditure is 10 and there are no income taxes or imports,then the MPC is

Accepted Answer

A)  0.9. 
B)  0.1. 
C)  1.0. 
D)  9.0. 
A)  0.9. 
B)  0.1. 
C)  1.0. 
D)  9.0.

Question 18

When there is unplanned inventory investment,aggregate planned expenditure is ________ real GDP and actual investment is ________ planned investment.

Accepted Answer

A)  greater than; greater than 
B)  greater than; less than 
C)  less than; greater than 
D)  less than; less than 
A)  greater than; greater than 
B)  greater than; less than 
C)  less than; greater than 
D)  less than; less than

Question 19

If the price level is constant and the slope of the AE curve is 0.75,a decrease in investment of $100 leads to a decrease in real GDP of

Accepted Answer

A)  $25. 
B)  $100. 
C)  $400. 
D)  $800. 
A)  $25. 
B)  $100. 
C)  $400. 
D)  $800.

Question 20

When disposable income equals $800 billion,planned consumption expenditure equals $600 billion,and when disposable income equals $1,000 billion,planned consumption expenditure equals $760 billion.What is the marginal propensity to save?

Accepted Answer

A)  0.80 
B)  0.64 
C)  0.25 
D)  0.20 
A)  0.80 
B)  0.64 
C)  0.25 
D)  0.20

-In the figure above,the marginal propensity to consume is

When prices are fixed and there are no imports or income taxes,the value of the multiplier is

A change in the real interest rate creates a movement along the consumption function.

-The figure above illustrates an economy's consumption function.What is the marginal propensity to consume in this economy?

-In the figure above,negative saving occurs

Real GDP (trillions of 2005 dollars) Aggregate expenditure (trillions of 2005 dollars) 0 0.3 1.0 1.2 2.0 2.1 3.0 3.0 4.0 3.9 5.0 4.8 -In the above table,equilibrium expenditure is

Disposable income (billions of dollars) Consumption expenditure (billions of dollars) 400 450 600 600 800 750 1000 900 1200 1050 -Based upon the above table,saving equals $100 billion when disposable income equals

"Similar to imports,U.S.exports depend on the level of U.S.real GDP so that if real GDP increases,U.S.exports increase." Explain whether the previous sentence is correct or incorrect.

-In the above figure,consumption and disposable income are equal at

Real GDP (trillions of 2005 dollars) Aggregate expenditure (trillions of 2005 dollars) 0 0.3 1.0 1.2 2.0 2.1 3.0 3.0 4.0 3.9 5.0 4.8 -The data in the above table indicate that autonomous expenditure is

-In the figure above,autonomous consumption is

An increase in expected future income ________.

Suppose the economy has no income taxes or imports.How is the size of the expenditure multiplier related to the marginal propensity to consume? What is the multiplier if the MPC equals 0.25? If the MPC equals 0.50? If the MPC equals 0.90?

What is the relationship between U.S.real GDP and U.S.imports?

Equilibrium expenditure occurs where the aggregate expenditure curve crosses the

Suppose the equilibrium level of expenditure is $13 trillion.If real GDP is $12 trillion,then inventories are their target levels and real GDP will .

If the multiplier for a change in autonomous expenditure is 10 and there are no income taxes or imports,then the MPC is

When there is unplanned inventory investment,aggregate planned expenditure is real GDP and actual investment is planned investment.

If the price level is constant and the slope of the AE curve is 0.75,a decrease in investment of $100 leads to a decrease in real GDP of

When disposable income equals $800 billion,planned consumption expenditure equals $600 billion,and when disposable income equals $1,000 billion,planned consumption expenditure equals $760 billion.What is the marginal propensity to save?

What Is Economics

The Economic Problem

Demand and Supply

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

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Exam 11: Expenditure Multipliers

-In the figure above,the marginal propensity to consume is

When prices are fixed and there are no imports or income taxes,the value of the multiplier is

A change in the real interest rate creates a movement along the consumption function.

-The figure above illustrates an economy's consumption function.What is the marginal propensity to consume in this economy?

-In the figure above,negative saving occurs

Real GDP (trillions of 2005 dollars) Aggregate expenditure (trillions of 2005 dollars) 0 0.3 1.0 1.2 2.0 2.1 3.0 3.0 4.0 3.9 5.0 4.8 -In the above table,equilibrium expenditure is

Disposable income (billions of dollars) Consumption expenditure (billions of dollars) 400 450 600 600 800 750 1000 900 1200 1050 -Based upon the above table,saving equals $100 billion when disposable income equals

"Similar to imports,U.S.exports depend on the level of U.S.real GDP so that if real GDP increases,U.S.exports increase." Explain whether the previous sentence is correct or incorrect.

-In the above figure,consumption and disposable income are equal at

Real GDP (trillions of 2005 dollars) Aggregate expenditure (trillions of 2005 dollars) 0 0.3 1.0 1.2 2.0 2.1 3.0 3.0 4.0 3.9 5.0 4.8 -The data in the above table indicate that autonomous expenditure is

-In the figure above,autonomous consumption is

An increase in expected future income ________.

Suppose the economy has no income taxes or imports.How is the size of the expenditure multiplier related to the marginal propensity to consume? What is the multiplier if the MPC equals 0.25? If the MPC equals 0.50? If the MPC equals 0.90?

What is the relationship between U.S.real GDP and U.S.imports?

Equilibrium expenditure occurs where the aggregate expenditure curve crosses the

Suppose the equilibrium level of expenditure is $13 trillion.If real GDP is $12 trillion,then inventories are ________ their target levels and real GDP will ________.

If the multiplier for a change in autonomous expenditure is 10 and there are no income taxes or imports,then the MPC is

When there is unplanned inventory investment,aggregate planned expenditure is ________ real GDP and actual investment is ________ planned investment.

If the price level is constant and the slope of the AE curve is 0.75,a decrease in investment of $100 leads to a decrease in real GDP of

When disposable income equals $800 billion,planned consumption expenditure equals $600 billion,and when disposable income equals $1,000 billion,planned consumption expenditure equals $760 billion.What is the marginal propensity to save?

What Is Economics

The Economic Problem

Demand and Supply

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

Inflation, Jobs, and the Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Introduction

Monitoring Macroeconomic Performance

Macroeconomic Trends

Macroeconomic Fluctuations

Macroeconomic Policy

Filters

Suppose the equilibrium level of expenditure is $13 trillion.If real GDP is $12 trillion,then inventories are their target levels and real GDP will .

When there is unplanned inventory investment,aggregate planned expenditure is real GDP and actual investment is planned investment.