Question 1

Total production

Accepted Answer

A)  always equals total expenditures. 
B)  equals total expenditures in equilibrium. 
C)  is always greater than total expenditures. 
D)  is always less than total expenditures. 
A)  always equals total expenditures. 
B)  equals total expenditures in equilibrium. 
C)  is always greater than total expenditures. 
D)  is always less than total expenditures.

Question 2

When total expenditure (TE)exceeds total production (TP),inventory levels rise unexpectedly,which sends a signal to firms that they have overproduced,so they cut back on production.

Accepted Answer

A) True 
 B)False

Question 3

Given the following data,what is the distance from the origin to the point where the total expenditures (TE)curve cuts the vertical axis? ​
C = $700 + 0.75Yd
I = $350
G = $640
​

Accepted Answer

A)  $1,690 
B)  $1,050 
C)  $1,220 
D)  $990 
E)  $1,050.75 
A)  $1,690 
B)  $1,050 
C)  $1,220 
D)  $990 
E)  $1,050.75

Question 4

The economy is in equilibrium,TP = TE,and Real GDP is $500 billion.The MPC is 0.95,the multiplier is operative,and idle resources exist at each expenditure round.Autonomous investment spending rises by $4 billion.As a result,the TE curve shifts __________,inventory levels unexpectedly __________,business firms __________ the quantity of goods and services they produce,and Real GDP __________ by __________.

Accepted Answer

A)  upward; fall; increase; rises; $3.8 billion 
B)  upward; fall; increase; rises; $8 billion 
C)  downward; rise; decrease; falls; $80 billion 
D)  upward; fall; increase; rises; $80 billion 
E)  downward; fall; decrease; falls; $3.8 billion 
A)  upward; fall; increase; rises; $3.8 billion 
B)  upward; fall; increase; rises; $8 billion 
C)  downward; rise; decrease; falls; $80 billion 
D)  upward; fall; increase; rises; $80 billion 
E)  downward; fall; decrease; falls; $3.8 billion

Question 5

The efficiency wage model is an explanation of wage __________ and thus a support for the ____________________ view.

Accepted Answer

A)  flexibility; Keynesian 
B)  flexibility; classical 
C)  inflexibility; Keynesian 
D)  inflexibility; classical 
A)  flexibility; Keynesian 
B)  flexibility; classical 
C)  inflexibility; Keynesian 
D)  inflexibility; classical

Question 6

-Refer to Exhibit 10-8.When disposable income equals $3,000,saving equals

Accepted Answer

A)  -$200. 
B)  $500. 
C)  $175. 
D)  $200. 
A)  -$200. 
B)  $500. 
C)  $175. 
D)  $200.

Question 7

In reality,idle resources must exist in the economy in order for the multiplier process to lead to an increase in Real GDP.

Accepted Answer

A) True 
 B)False

Question 8

-Refer to Exhibit 10-3.The multiplier is

Accepted Answer

A)  4. 
B)  5. 
C)  10. 
D)  1. 
E)  none of the above 
A)  4. 
B)  5. 
C)  10. 
D)  1. 
E)  none of the above

Question 9

-Refer to Exhibit 10-6.If total production (TP)is greater than total expenditures (TE),the economy is currently producing a level of Real GDP that is

Accepted Answer

A)  equal to or lower than Q3. 
B)  equal to or greater than Q3. 
C)  less than Q2. 
D)  between Q2 and Q1. 
E)  greater than Q3. 
A)  equal to or lower than Q3. 
B)  equal to or greater than Q3. 
C)  less than Q2. 
D)  between Q2 and Q1. 
E)  greater than Q3.

Question 10

Here is a consumption function: C = C0 + MPC(Yd).If consumption is $3,300,MPC =0.85,and disposable income is $2,100,what does autonomous consumption equal?

Accepted Answer

A)  $899.15 
B)  $450 
C)  $1,515 
D)  $4,785 
E)  none of the above 
A)  $899.15 
B)  $450 
C)  $1,515 
D)  $4,785 
E)  none of the above

Question 11

Which of the following is consistent with the classical view of Say's law?

Accepted Answer

A)  Saving increases by $2 billion and investment decreases by $2 billion. 
B)  Saving increases by $2 billion and consumption rises by $2 billion. 
C)  Saving increases by $2 billion,consumption decreases by $2 billion,and investment rises by something less than $2 billion. 
D)  Saving decreases by $2 billion and consumption decreases by more than $2 billion. 
E)  none of the above 
A)  Saving increases by $2 billion and investment decreases by $2 billion. 
B)  Saving increases by $2 billion and consumption rises by $2 billion. 
C)  Saving increases by $2 billion,consumption decreases by $2 billion,and investment rises by something less than $2 billion. 
D)  Saving decreases by $2 billion and consumption decreases by more than $2 billion. 
E)  none of the above

Question 12

-Refer to Exhibit 10-9.What is the value of the marginal propensity to consume (MPC)that would correctly fill in blank (C)and the marginal propensity to save (MPS)that would correctly fill in blank (D)?

Accepted Answer

A)  0.90; 0.10 
B)  0.10; 10 
C)  0.90; 9 
D)  0.01; 100 
A)  0.90; 0.10 
B)  0.10; 10 
C)  0.90; 9 
D)  0.01; 100

Question 13

-Refer to Exhibit 10-9.What is the value of the marginal propensity to save (MPS)that would correctly fill in blank (E)and the multiplier that would correctly fill in blank (F)?

Accepted Answer

A)  0.012; 0.83 
B)  0.12; 88 
C)  0.15; 15 
D)  0.15; 6.67 
A)  0.012; 0.83 
B)  0.12; 88 
C)  0.15; 15 
D)  0.15; 6.67

Question 14

In the simple Keynesian model,there are three simplifying assumptions.One of these assumptions is:

Accepted Answer

A)  no consumption 
B)  no investment 
C)  no exports or imports 
D)  a and b 
E)  a,b,and c 
A)  no consumption 
B)  no investment 
C)  no exports or imports 
D)  a and b 
E)  a,b,and c

Question 15

Who would be most likely to agree that "People do not always save more as interest rates rise"?

Accepted Answer

A)  a classical economist 
B)  John Maynard Keynes 
C)  an efficiency wage theorist 
D)  a and b 
E)  a,b,and c 
A)  a classical economist 
B)  John Maynard Keynes 
C)  an efficiency wage theorist 
D)  a and b 
E)  a,b,and c

Question 16

Which of the following statements is false?

Accepted Answer

A)  Keynes believed that monopolistic elements in the economy will prevent immediate price declines. 
B)  Keynes believed that during periods of high unemployment,labor unions will prevent wages from falling fast enough to restore full employment. 
C)  Keynes believed that interest rate flexibility will ensure that saving is equal to investment. 
D)  Keynes did not believe in Say's law. 
A)  Keynes believed that monopolistic elements in the economy will prevent immediate price declines. 
B)  Keynes believed that during periods of high unemployment,labor unions will prevent wages from falling fast enough to restore full employment. 
C)  Keynes believed that interest rate flexibility will ensure that saving is equal to investment. 
D)  Keynes did not believe in Say's law.

Question 17

John Maynard Keynes was the son of

Accepted Answer

A)  one of the first female students to attend Cambridge University. 
B)  Russian ballerina Lydia Lopokova. 
C)  the mayor of London. 
D)  an eminent economist. 
E)  a and d 
A)  one of the first female students to attend Cambridge University. 
B)  Russian ballerina Lydia Lopokova. 
C)  the mayor of London. 
D)  an eminent economist. 
E)  a and d

Question 18

If the multiplier is 5,then the MPC must be

Accepted Answer

A)  1/5. 
B)  1/6. 
C)  3/4. 
D)  4/5. 
E)  2/3. 
A)  1/5. 
B)  1/6. 
C)  3/4. 
D)  4/5. 
E)  2/3.

Question 19

-Refer to Exhibit 10-6.Which of the following is consistent with the economy producing Q2?

Accepted Answer

A)  Total expenditures (T
E) is less than total production (TP). 
B)  Firms are currently holding their optimum inventory levels. 
C)  Autonomous spending is greater than zero. 
D)  Total expenditures (T
E) are equal to total production (TP). 
E)  none of the above 
A)  Total expenditures (T
E) is less than total production (TP). 
B)  Firms are currently holding their optimum inventory levels. 
C)  Autonomous spending is greater than zero. 
D)  Total expenditures (T
E) are equal to total production (TP). 
E)  none of the above

Question 20

There are no idle resources,the multiplier is operative,and autonomous spending rises.It follows that

Accepted Answer

A)  Real GDP will not increase. 
B)  Real GDP will rise. 
C)  prices will rise. 
D)  a and c 
E)  a,b,and c 
A)  Real GDP will not increase. 
B)  Real GDP will rise. 
C)  prices will rise. 
D)  a and c 
E)  a,b,and c

Exam 10: Monopoly

Total production

When total expenditure (TE)exceeds total production (TP),inventory levels rise unexpectedly,which sends a signal to firms that they have overproduced,so they cut back on production.

Given the following data,what is the distance from the origin to the point where the total expenditures (TE)curve cuts the vertical axis? ​ C = $700 + 0.75Yd I = $350 G = $640 ​

The efficiency wage model is an explanation of wage __________ and thus a support for the ____________________ view.

-Refer to Exhibit 10-8.When disposable income equals $3,000,saving equals

In reality,idle resources must exist in the economy in order for the multiplier process to lead to an increase in Real GDP.

-Refer to Exhibit 10-3.The multiplier is

-Refer to Exhibit 10-6.If total production (TP)is greater than total expenditures (TE),the economy is currently producing a level of Real GDP that is

Here is a consumption function: C = C0 + MPC(Yd).If consumption is $3,300,MPC =0.85,and disposable income is $2,100,what does autonomous consumption equal?

Which of the following is consistent with the classical view of Say's law?

-Refer to Exhibit 10-9.What is the value of the marginal propensity to consume (MPC)that would correctly fill in blank (C)and the marginal propensity to save (MPS)that would correctly fill in blank (D)?

-Refer to Exhibit 10-9.What is the value of the marginal propensity to save (MPS)that would correctly fill in blank (E)and the multiplier that would correctly fill in blank (F)?

In the simple Keynesian model,there are three simplifying assumptions.One of these assumptions is:

Who would be most likely to agree that "People do not always save more as interest rates rise"?

Which of the following statements is false?

John Maynard Keynes was the son of

If the multiplier is 5,then the MPC must be

-Refer to Exhibit 10-6.Which of the following is consistent with the economy producing Q2?

There are no idle resources,the multiplier is operative,and autonomous spending rises.It follows that

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free,controlled,and Relative

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

Given the following data,what is the distance from the origin to the point where the total expenditures (TE)curve cuts the vertical axis? C = $700 + 0.75Yd I = $350 G = $640

The efficiency wage model is an explanation of wage and thus a support for the __________ view.

Here is a consumption function: C = C₀ + MPC(Y_d).If consumption is $3,300,MPC =0.85,and disposable income is $2,100,what does autonomous consumption equal?

-Refer to Exhibit 10-6.Which of the following is consistent with the economy producing Q₂?