Question 1

If planned aggregate expenditure is above potential GDP and planned aggregate expenditure equals GDP,then

Accepted Answer

A) actual inventory investment will be less than planned inventory investment. 
B) actual inventory investment will be greater than planned inventory investment. 
C) the economy is in an expansion. 
D) the economy is at full employment. 
A) actual inventory investment will be less than planned inventory investment. 
B) actual inventory investment will be greater than planned inventory investment. 
C) the economy is in an expansion. 
D) the economy is at full employment.

Question 2

From 1983-2013,net exports for the United States

Accepted Answer

A) grew and then declined. 
B) were negative. 
C) were positive. 
D) increased as exports rose above imports. 
A) grew and then declined. 
B) were negative. 
C) were positive. 
D) increased as exports rose above imports.

Question 3

Aggregate expenditure includes spending on

Accepted Answer

A) C + I + G. 
B) C + I + G - NX. 
C) C + I + G + NX. 
D) C + I + depreciation - NX. 
A) C + I + G. 
B) C + I + G - NX. 
C) C + I + G + NX. 
D) C + I + depreciation - NX.

Question 4

The five most important variables that determine the level of ________ are disposable income,wealth,expected future income,price level,and interest rate.

Accepted Answer

A) consumption 
B) government purchases 
C) planned investment 
D) net exports 
A) consumption 
B) government purchases 
C) planned investment 
D) net exports

Question 5

Figure 12-1  
-Refer to Figure 12-1.If the economy is in equilibrium,it is at a level of aggregate expenditure given by point

Accepted Answer

A) J. 
B) K. 
C) L. 
D) Points J,K and L all represent equilibrium. 
A) J. 
B) K. 
C) L. 
D) Points J,K and L all represent equilibrium.

Question 6

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China ________ U.S.firms is ________ the value of assembling the iPhones in Chinese factories.

Accepted Answer

A) exports to; equal to 
B) exports to; greater than 
C) imports from; less than 
D) imports from; greater than 
A) exports to; equal to 
B) exports to; greater than 
C) imports from; less than 
D) imports from; greater than

Question 7

Figure 12-1  
-Refer to Figure 12-1.According to the figure above,at what point is aggregate expenditure greater than GDP?

Accepted Answer

A) J 
B) K 
C) L 
D) none of the above 
A) J 
B) K 
C) L 
D) none of the above

Question 8

The key idea of the aggregate expenditure model is that in any particular year,the level of ________ is determined mainly by the level of aggregate expenditure.

Accepted Answer

A) frictional unemployment 
B) export spending 
C) government spending 
D) GDP 
A) frictional unemployment 
B) export spending 
C) government spending 
D) GDP

Question 9

Inventories refer to

Accepted Answer

A) goods which have been presold before they are produced. 
B) goods that have been produced but not yet sold. 
C) goods that have been planned but not yet produced. 
D) goods that have been produced and sold in the same year. 
A) goods which have been presold before they are produced. 
B) goods that have been produced but not yet sold. 
C) goods that have been planned but not yet produced. 
D) goods that have been produced and sold in the same year.

Question 10

Table 12-13
  
-Refer to Table 12-13.Using the table above,answer the following questions.The numbers in the table are in billions of dollars.
a.What is the equilibrium level of real GDP?
b.What is the MPC?
c.If investment spending declines by $50 billion,what will happen to equilibrium GDP?

Accepted Answer

a.Equilibrium real GDP is determined whe

Question 11

Given Table 12-6 below,fill in the values for saving.Assume taxes = $800.
Table 12-6

Accepted Answer

Saving = national in

Question 12

If consumption is defined as C = 1,350 + 0.6Y,then the marginal propensity to consume is 0.6.

Accepted Answer

A) True 
 B)False

Question 13

National income =

Accepted Answer

A) Consumption + Saving - Taxes 
B) Consumption - Saving - Taxes 
C) Consumption - Saving +Taxes 
D) Consumption + Saving + Taxes 
A) Consumption + Saving - Taxes 
B) Consumption - Saving - Taxes 
C) Consumption - Saving +Taxes 
D) Consumption + Saving + Taxes

Question 14

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

Accepted Answer

A) aggregate demand curve 
B) savings line 
C) 45-degree line 
D) consumption function 
A) aggregate demand curve 
B) savings line 
C) 45-degree line 
D) consumption function

Question 15

An example of assets that are included in ________ would be stocks,bonds,and savings accounts.

Accepted Answer

A) household wealth 
B) household income 
C) planned investment 
D) consumer purchases 
A) household wealth 
B) household income 
C) planned investment 
D) consumer purchases

Question 16

What impact does an increase in the price level in the United States have on net exports and why?

Accepted Answer

A) An increase in the price level decreases net exports because higher prices decrease the value of the dollar. 
B) An increase in the price level decreases net exports by increasing the relative cost of American goods. 
C) An increase in the price level increases net exports because higher prices lower the value of the dollar. 
D) An increase in the price level increases net exports because higher prices decrease American spending on imports. 
A) An increase in the price level decreases net exports because higher prices decrease the value of the dollar. 
B) An increase in the price level decreases net exports by increasing the relative cost of American goods. 
C) An increase in the price level increases net exports because higher prices lower the value of the dollar. 
D) An increase in the price level increases net exports because higher prices decrease American spending on imports.

Question 17

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 2,000 + 0.9Y
I = 2,500
G = 3,000
NX = 400

Accepted Answer

A) $4,333 
B) $7,100 
C) $8,778 
D) $79,000 
A) $4,333 
B) $7,100 
C) $8,778 
D) $79,000

Question 18

You review a salesman's income over a 5-year period.You note it fluctuates tremendously from year to year,yet his consumption of goods and services remains consistently at the same level,year after year.Does this mean that income is not a determinant of consumption,or could something else explain his behavior?

Accepted Answer

The salesman is not making purchase deci

Question 19

Consumption is $5 million,planned investment spending is $8 million,government purchases are $10 million,and net exports are equal to $2 million.If GDP during that same time period is equal to $23 million,what unplanned changes in inventories occurred?

Accepted Answer

A) There was an unplanned increase in inventories equal to $2 million. 
B) There was no unplanned change in inventories. 
C) There was an unplanned decrease in inventories equal to $2 million. 
D) There was an unplanned decrease in inventories equal to $19 million. 
A) There was an unplanned increase in inventories equal to $2 million. 
B) There was no unplanned change in inventories. 
C) There was an unplanned decrease in inventories equal to $2 million. 
D) There was an unplanned decrease in inventories equal to $19 million.

Question 20

An increase in aggregate expenditure has what result on equilibrium GDP?

Accepted Answer

A) Equilibrium GDP rises. 
B) Equilibrium GDP is not affected by a decrease in aggregate expenditure. 
C) Equilibrium GDP falls. 
D) Equilibrium GDP may rise or fall depending on the size of the decrease in aggregate expenditure relative to the initial level of GDP. 
A) Equilibrium GDP rises. 
B) Equilibrium GDP is not affected by a decrease in aggregate expenditure. 
C) Equilibrium GDP falls. 
D) Equilibrium GDP may rise or fall depending on the size of the decrease in aggregate expenditure relative to the initial level of GDP.

If planned aggregate expenditure is above potential GDP and planned aggregate expenditure equals GDP,then

From 1983-2013,net exports for the United States

Aggregate expenditure includes spending on

The five most important variables that determine the level of ________ are disposable income,wealth,expected future income,price level,and interest rate.

Figure 12-1 -Refer to Figure 12-1.If the economy is in equilibrium,it is at a level of aggregate expenditure given by point

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China U.S.firms is the value of assembling the iPhones in Chinese factories.

Figure 12-1 -Refer to Figure 12-1.According to the figure above,at what point is aggregate expenditure greater than GDP?

The key idea of the aggregate expenditure model is that in any particular year,the level of ________ is determined mainly by the level of aggregate expenditure.

Inventories refer to

Table 12-13 -Refer to Table 12-13.Using the table above,answer the following questions.The numbers in the table are in billions of dollars. a.What is the equilibrium level of real GDP? b.What is the MPC? c.If investment spending declines by $50 billion,what will happen to equilibrium GDP?

Given Table 12-6 below,fill in the values for saving.Assume taxes = $800. Table 12-6

If consumption is defined as C = 1,350 + 0.6Y,then the marginal propensity to consume is 0.6.

National income =

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

An example of assets that are included in ________ would be stocks,bonds,and savings accounts.

What impact does an increase in the price level in the United States have on net exports and why?

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400

Consumption is $5 million,planned investment spending is $8 million,government purchases are $10 million,and net exports are equal to $2 million.If GDP during that same time period is equal to $23 million,what unplanned changes in inventories occurred?

An increase in aggregate expenditure has what result on equilibrium GDP?

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 above potential GDP and planned aggregate expenditure equals GDP,then

From 1983-2013,net exports for the United States

Aggregate expenditure includes spending on

The five most important variables that determine the level of ________ are disposable income,wealth,expected future income,price level,and interest rate.

Figure 12-1 -Refer to Figure 12-1.If the economy is in equilibrium,it is at a level of aggregate expenditure given by point

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China ________ U.S.firms is ________ the value of assembling the iPhones in Chinese factories.

Figure 12-1 -Refer to Figure 12-1.According to the figure above,at what point is aggregate expenditure greater than GDP?

The key idea of the aggregate expenditure model is that in any particular year,the level of ________ is determined mainly by the level of aggregate expenditure.

Inventories refer to

Table 12-13 -Refer to Table 12-13.Using the table above,answer the following questions.The numbers in the table are in billions of dollars. a.What is the equilibrium level of real GDP? b.What is the MPC? c.If investment spending declines by $50 billion,what will happen to equilibrium GDP?

Given Table 12-6 below,fill in the values for saving.Assume taxes = $800. Table 12-6

If consumption is defined as C = 1,350 + 0.6Y,then the marginal propensity to consume is 0.6.

National income =

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

An example of assets that are included in ________ would be stocks,bonds,and savings accounts.

What impact does an increase in the price level in the United States have on net exports and why?

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400

Consumption is $5 million,planned investment spending is $8 million,government purchases are $10 million,and net exports are equal to $2 million.If GDP during that same time period is equal to $23 million,what unplanned changes in inventories occurred?

An increase in aggregate expenditure has what result on equilibrium GDP?

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

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China U.S.firms is the value of assembling the iPhones in Chinese factories.