Question 1

If planned aggregate expenditure is less than total production,

Accepted Answer

A) actual inventories will equal planned inventories. 
B) firms will experience an unplanned increase in inventories. 
C) GDP will increase. 
D) the economy is in equilibrium. 
A) actual inventories will equal planned inventories. 
B) firms will experience an unplanned increase in inventories. 
C) GDP will increase. 
D) the economy is in equilibrium.

Question 2

In the aggregate expenditure model,________ has both an autonomous component and an induced component.

Accepted Answer

A) planned investment spending 
B) consumption spending 
C) government spending 
D) net export spending 
A) planned investment spending 
B) consumption spending 
C) government spending 
D) net export spending

Question 3

Consumption spending refers to ________ spending on goods and services.

Accepted Answer

A) household 
B) business 
C) government 
D) foreign 
A) household 
B) business 
C) government 
D) foreign

Question 4

At each of the three points in the following graph,indicate whether planned aggregate expenditure is greater than,equal to,or less than GDP?

Accepted Answer

At point J,planned aggregate e

Question 5

When aggregate expenditure is less than GDP,which of the following is true?

Accepted Answer

A) There was an unplanned increase in inventories. 
B) Firms spent more on capital goods than they anticipated. 
C) Households bought more new homes than they anticipated. 
D) All of the above must be true when aggregate expenditure is less than GDP. 
A) There was an unplanned increase in inventories. 
B) Firms spent more on capital goods than they anticipated. 
C) Households bought more new homes than they anticipated. 
D) All of the above must be true when aggregate expenditure is less than GDP.

Question 6

The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China,which is assembly,is

Accepted Answer

A) 4 percent. 
B) 12 percent. 
C) 25 percent. 
D) 65 percent. 
A) 4 percent. 
B) 12 percent. 
C) 25 percent. 
D) 65 percent.

Question 7

How does an increase in government spending affect the aggregate expenditure line?

Accepted Answer

A) It shifts the aggregate expenditure line upward. 
B) It shifts the aggregate expenditure line downward. 
C) It increases the slope of the aggregate expenditure line. 
D) It decreases the slope of the aggregate expenditure line. 
A) It shifts the aggregate expenditure line upward. 
B) It shifts the aggregate expenditure line downward. 
C) It increases the slope of the aggregate expenditure line. 
D) It decreases the slope of the aggregate expenditure line.

Question 8

Higher interest rates increase both consumption and investment spending.

Accepted Answer

A) True 
 B)False

Question 9

If the consumption function is defined as C = 5,500 + 0.9Y,what is the value of the multiplier?

Accepted Answer

A) 0.1 
B) 0.9 
C) 9 
D) 10 
A) 0.1 
B) 0.9 
C) 9 
D) 10

Question 10

The marginal propensity to consume is the slope of the consumption function.

Accepted Answer

A) True 
 B)False

Question 11

A decrease in the price level results in a(n)________ in household consumption spending and a(n)________ in investment spending.

Accepted Answer

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

Question 12

Macroeconomic equilibrium can occur at any point on the 45-degree line.

Accepted Answer

A) True 
 B)False

Question 13

If economists forecast a decrease in aggregate expenditure,which of the following is likely to occur?

Accepted Answer

A) GDP will rise. 
B) GDP will fall. 
C) Wages will rise. 
D) Inventories will fall. 
A) GDP will rise. 
B) GDP will fall. 
C) Wages will rise. 
D) Inventories will fall.

Question 14

U.S.net export spending falls when

Accepted Answer

A) the price level in the United States falls relative to the price level in other countries. 
B) the growth rate of U.S.GDP is faster than the growth rate of GDP in other countries. 
C) the value of the U.S.dollar decreases relative to other currencies. 
D) the inflation rate is lower in the United States relative to other countries. 
A) the price level in the United States falls relative to the price level in other countries. 
B) the growth rate of U.S.GDP is faster than the growth rate of GDP in other countries. 
C) the value of the U.S.dollar decreases relative to other currencies. 
D) the inflation rate is lower in the United States relative to other countries.

Question 15

Table 12-3
  
-Refer to Table 12-3.Given the consumption schedule in the table above,the marginal propensity to consume is

Accepted Answer

A) 0.1. 
B) 0.3. 
C) 0.6. 
D) 0.9. 
A) 0.1. 
B) 0.3. 
C) 0.6. 
D) 0.9.

Question 16

Which of the following will increase aggregate expenditure in the United States?

Accepted Answer

A) an increase in the value of the dollar 
B) an increase in the price level 
C) an increase in interest rates 
D) an increase in government purchases 
A) an increase in the value of the dollar 
B) an increase in the price level 
C) an increase in interest rates 
D) an increase in government purchases

Question 17

The aggregate demand curve illustrates the relationship between ________ and the ________,holding constant all other factors that affect aggregate expenditure.

Accepted Answer

A) the price level; quantity of planned aggregate expenditure 
B) the inflation rate; quantity of planned aggregate expenditure 
C) the price level; quantity of planned investment expenditure 
D) the price level; quantity of consumption expenditure 
A) the price level; quantity of planned aggregate expenditure 
B) the inflation rate; quantity of planned aggregate expenditure 
C) the price level; quantity of planned investment expenditure 
D) the price level; quantity of consumption expenditure

Question 18

Table 12-4
  
-Refer to Table 12-4.Given the consumption schedule in the table above,the marginal propensity to save is

Accepted Answer

A) 0.3. 
B) 0.4. 
C) 0.5. 
D) 0.6. 
A) 0.3. 
B) 0.4. 
C) 0.5. 
D) 0.6.

Question 19

If the consumption function is defined as C = 7,250 + 0.8Y,what is the multiplier?

Accepted Answer

A) 0.2 
B) 0.8 
C) 1.25 
D) 5 
A) 0.2 
B) 0.8 
C) 1.25 
D) 5

Question 20

An unplanned increase in inventories results from

Accepted Answer

A) an increase in planned investment. 
B) a decrease in planned investment. 
C) actual investment that is greater than planned investment. 
D) actual investment that is less than planned investment. 
A) an increase in planned investment. 
B) a decrease in planned investment. 
C) actual investment that is greater than planned investment. 
D) actual investment that is less than planned investment.

If planned aggregate expenditure is less than total production,

In the aggregate expenditure model,________ has both an autonomous component and an induced component.

Consumption spending refers to ________ spending on goods and services.

At each of the three points in the following graph,indicate whether planned aggregate expenditure is greater than,equal to,or less than GDP?

When aggregate expenditure is less than GDP,which of the following is true?

The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China,which is assembly,is

How does an increase in government spending affect the aggregate expenditure line?

Higher interest rates increase both consumption and investment spending.

If the consumption function is defined as C = 5,500 + 0.9Y,what is the value of the multiplier?

The marginal propensity to consume is the slope of the consumption function.

A decrease in the price level results in a(n) in household consumption spending and a(n) in investment spending.

Macroeconomic equilibrium can occur at any point on the 45-degree line.

If economists forecast a decrease in aggregate expenditure,which of the following is likely to occur?

U.S.net export spending falls when

Table 12-3 -Refer to Table 12-3.Given the consumption schedule in the table above,the marginal propensity to consume is

Which of the following will increase aggregate expenditure in the United States?

The aggregate demand curve illustrates the relationship between and the ,holding constant all other factors that affect aggregate expenditure.

Table 12-4 -Refer to Table 12-4.Given the consumption schedule in the table above,the marginal propensity to save is

If the consumption function is defined as C = 7,250 + 0.8Y,what is the multiplier?

An unplanned increase in inventories results from

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 12: Aggregate Expenditure and Output in the Short Run

If planned aggregate expenditure is less than total production,

In the aggregate expenditure model,________ has both an autonomous component and an induced component.

Consumption spending refers to ________ spending on goods and services.

At each of the three points in the following graph,indicate whether planned aggregate expenditure is greater than,equal to,or less than GDP?

When aggregate expenditure is less than GDP,which of the following is true?

The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China,which is assembly,is

How does an increase in government spending affect the aggregate expenditure line?

Higher interest rates increase both consumption and investment spending.

If the consumption function is defined as C = 5,500 + 0.9Y,what is the value of the multiplier?

The marginal propensity to consume is the slope of the consumption function.

A decrease in the price level results in a(n)________ in household consumption spending and a(n)________ in investment spending.

Macroeconomic equilibrium can occur at any point on the 45-degree line.

If economists forecast a decrease in aggregate expenditure,which of the following is likely to occur?

U.S.net export spending falls when

Table 12-3 -Refer to Table 12-3.Given the consumption schedule in the table above,the marginal propensity to consume is

Which of the following will increase aggregate expenditure in the United States?

The aggregate demand curve illustrates the relationship between ________ and the ________,holding constant all other factors that affect aggregate expenditure.

Table 12-4 -Refer to Table 12-4.Given the consumption schedule in the table above,the marginal propensity to save is

If the consumption function is defined as C = 7,250 + 0.8Y,what is the multiplier?

An unplanned increase in inventories results from

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

A decrease in the price level results in a(n) in household consumption spending and a(n) in investment spending.

The aggregate demand curve illustrates the relationship between and the ,holding constant all other factors that affect aggregate expenditure.