Question 1

-Refer to the above graph to answer this question.What is the value of the marginal leakage rate?

Accepted Answer

A) 0.2. 
B) 0.5. 
C) 2. 
D) 2.5. 
A) 0.2. 
B) 0.5. 
C) 2. 
D) 2.5.

Question 2

Which of the following is true regarding autonomous spending?

Accepted Answer

A) It depends on the level of income. 
B) It is the level of spending when income is zero. 
C) It falls as income rises. 
D) It can be negative. 
A) It depends on the level of income. 
B) It is the level of spending when income is zero. 
C) It falls as income rises. 
D) It can be negative.

Question 3

The value of the multiplier is equal to the inverse of the marginal leakage rate.

Accepted Answer

A) True 
 B)False

Question 4

-Refer to the above graph to answer this question.What is the value of the MPE?

Accepted Answer

A) 0.2 
B) 0.4 
C) 0.5 
D) 0.6 
E) 1 
A) 0.2 
B) 0.4 
C) 0.5 
D) 0.6 
E) 1

Question 5

Which of the following is generally more volatile than consumption?

Accepted Answer

A) Saving. 
B) Investment. 
C) Imports. 
D) Tax rates. 
A) Saving. 
B) Investment. 
C) Imports. 
D) Tax rates.

Question 6

Assume that in a particular economy,MPC = 0.6 and the MPM = 0.2.What is the value of the multiplier?

Accepted Answer

A) 0.6. 
B) 1.82. 
C) 1.67. 
D) 2. 
E) 5. 
A) 0.6. 
B) 1.82. 
C) 1.67. 
D) 2. 
E) 5.

Question 7

This data represents a hypothetical economy (all figures are in $billions):
  
-Refer to the information above to answer this question.What is the value of the MPC?

Accepted Answer

A) 0.4. 
B) 0.6. 
C) 0.75. 
D) 0.8. 
E) 1 
A) 0.4. 
B) 0.6. 
C) 0.75. 
D) 0.8. 
E) 1

Question 8

What is the marginal tax rate?

Accepted Answer

A) Total taxes divided by total income. 
B) Total income divided by total taxes. 
C) The difference in incomes divided by the difference in total taxes. 
D) The additional taxes paid divided by the original amount of taxes paid. 
E) The proportion of additional income which is taxed. 
A) Total taxes divided by total income. 
B) Total income divided by total taxes. 
C) The difference in incomes divided by the difference in total taxes. 
D) The additional taxes paid divided by the original amount of taxes paid. 
E) The proportion of additional income which is taxed.

Question 9

Which of the following supports the Keynesian argument that interest rates have no effect on consumption?

Accepted Answer

A) Consumers find it difficult to adjust their spending habits. 
B) Higher interest rates will decrease the demand for consumer loans but increase consumer saving. 
C) Interest rates are inflexible because of monopoly power in the economy. 
D) Autonomous consumption is usually zero in most modern economies. 
A) Consumers find it difficult to adjust their spending habits. 
B) Higher interest rates will decrease the demand for consumer loans but increase consumer saving. 
C) Interest rates are inflexible because of monopoly power in the economy. 
D) Autonomous consumption is usually zero in most modern economies.

Question 10

How is the MPC defined?

Accepted Answer

A) It is the fraction of a change in income which is not spent. 
B) It is the fraction of a change in consumption that results from a change in income. 
C) It is the fraction of total income which is not consumed. 
D) It is the fraction of total income which is consumed. 
E) It is the fraction of a change in the level of income that results from a change in consumption. 
A) It is the fraction of a change in income which is not spent. 
B) It is the fraction of a change in consumption that results from a change in income. 
C) It is the fraction of total income which is not consumed. 
D) It is the fraction of total income which is consumed. 
E) It is the fraction of a change in the level of income that results from a change in consumption.

Question 11

This data represents a hypothetical economy (all figures are in $billions):
  
-Refer to the information above to answer this question.What is the value of the MPS?

Accepted Answer

A) 0.15. 
B) 0.20. 
C) 0.25. 
D) 0.40. 
E) 0.60. 
A) 0.15. 
B) 0.20. 
C) 0.25. 
D) 0.40. 
E) 0.60.

Question 12

-Refer to the information above to answer this question.What is the equation for aggregate expenditures?

Accepted Answer

A) AE = 600. 
B) AE = 2000. 
C) AE = 600 + 0.6Y. 
D) AE = 600 + 0.8Y. 
E) AE = 600 - 0.8Y 
A) AE = 600. 
B) AE = 2000. 
C) AE = 600 + 0.6Y. 
D) AE = 600 + 0.8Y. 
E) AE = 600 - 0.8Y

Question 13

Graphically,when is the balance of trade equal to zero?

Accepted Answer

A) When the rising IM line intersects the horizontal X line. 
B) When the rising X line intersects the horizontal IM line. 
C) When the rising IM line intersects the horizontal axis. 
D) When the rising X line intersects the horizontal axis. 
A) When the rising IM line intersects the horizontal X line. 
B) When the rising X line intersects the horizontal IM line. 
C) When the rising IM line intersects the horizontal axis. 
D) When the rising X line intersects the horizontal axis.

Question 14

If in an economy,the MTR = 0.2,the MPS = 0.25,and the MPM = 0.15,what is the value of the MPE?

Accepted Answer

A) 0.4 
B) 0.45 
C) 0.5 
D) 0.6 
E) 0.7 
A) 0.4 
B) 0.45 
C) 0.5 
D) 0.6 
E) 0.7

Question 15

The following data refers to a national economy with all figures in $billions.
  
-Refer to the table above to answer this question.What is the value of the MPC?

Accepted Answer

A) 0.4 
B) 0.5 
C) 0.6 
D) 0.8 
E) 2 
A) 0.4 
B) 0.5 
C) 0.6 
D) 0.8 
E) 2

Question 16

-Refer to the data above to answer this question.What is the value of autonomous aggregate expenditures?

Accepted Answer

A) 0. 
B) 200. 
C) 1,200. 
D) 2,500. 
E) 4,000. 
A) 0. 
B) 200. 
C) 1,200. 
D) 2,500. 
E) 4,000.

Question 17

Assume that in a particular economy the MPC = 0.64 and the MPM = 0.14.
-Refer to the information above to answer this question.What is the value of the multiplier?

Accepted Answer

A) 1. 
B) 2. 
C) 2.17. 
D) 2.5. 
A) 1. 
B) 2. 
C) 2.17. 
D) 2.5.

Question 18

What is the formula for the marginal leakage rate?

Accepted Answer

A) ∆ aggregate expenditures/∆ national income 
B) (1 + MP
E)  
C) ∆ leakages/∆ aggregate expenditures 
D) (MPE - 1) 
E) (1 - MP
E)  
A) ∆ aggregate expenditures/∆ national income 
B) (1 + MP
E)  
C) ∆ leakages/∆ aggregate expenditures 
D) (MPE - 1) 
E) (1 - MP
E)

Question 19

What is true of unplanned investment?

Accepted Answer

A) It is equal to the difference between national income and the level of production. 
B) It is the amount of intended investment by firms. 
C) It is the amount of investment that results from an unexpected decrease in interest rates. 
D) It is equal to the difference between the level of production and aggregate expenditures. 
A) It is equal to the difference between national income and the level of production. 
B) It is the amount of intended investment by firms. 
C) It is the amount of investment that results from an unexpected decrease in interest rates. 
D) It is equal to the difference between the level of production and aggregate expenditures.

Question 20

Assume that in a particular economy the MPC = 0.64 and the MPM = 0.14.
-Refer to the graph to answer this question.What is the value of the multiplier?

Accepted Answer

A) 0.75. 
B) 2 
C) 2.5. 
D) 4. 
E) 500. 
A) 0.75. 
B) 2 
C) 2.5. 
D) 4. 
E) 500.

-Refer to the above graph to answer this question.What is the value of the marginal leakage rate?

Which of the following is true regarding autonomous spending?

The value of the multiplier is equal to the inverse of the marginal leakage rate.

-Refer to the above graph to answer this question.What is the value of the MPE?

Which of the following is generally more volatile than consumption?

Assume that in a particular economy,MPC = 0.6 and the MPM = 0.2.What is the value of the multiplier?

This data represents a hypothetical economy (all figures are in $billions): -Refer to the information above to answer this question.What is the value of the MPC?

What is the marginal tax rate?

Which of the following supports the Keynesian argument that interest rates have no effect on consumption?

How is the MPC defined?

This data represents a hypothetical economy (all figures are in $billions): -Refer to the information above to answer this question.What is the value of the MPS?

-Refer to the information above to answer this question.What is the equation for aggregate expenditures?

Graphically,when is the balance of trade equal to zero?

If in an economy,the MTR = 0.2,the MPS = 0.25,and the MPM = 0.15,what is the value of the MPE?

The following data refers to a national economy with all figures in $billions. -Refer to the table above to answer this question.What is the value of the MPC?

-Refer to the data above to answer this question.What is the value of autonomous aggregate expenditures?

Assume that in a particular economy the MPC = 0.64 and the MPM = 0.14. -Refer to the information above to answer this question.What is the value of the multiplier?

What is the formula for the marginal leakage rate?

What is true of unplanned investment?

Assume that in a particular economy the MPC = 0.64 and the MPM = 0.14. -Refer to the graph to answer this question.What is the value of the multiplier?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 6: Aggregate Expenditures

-Refer to the above graph to answer this question.What is the value of the marginal leakage rate?

Which of the following is true regarding autonomous spending?

The value of the multiplier is equal to the inverse of the marginal leakage rate.

-Refer to the above graph to answer this question.What is the value of the MPE?

Which of the following is generally more volatile than consumption?

Assume that in a particular economy,MPC = 0.6 and the MPM = 0.2.What is the value of the multiplier?

This data represents a hypothetical economy (all figures are in $billions): -Refer to the information above to answer this question.What is the value of the MPC?

What is the marginal tax rate?

Which of the following supports the Keynesian argument that interest rates have no effect on consumption?

How is the MPC defined?

This data represents a hypothetical economy (all figures are in $billions): -Refer to the information above to answer this question.What is the value of the MPS?

-Refer to the information above to answer this question.What is the equation for aggregate expenditures?

Graphically,when is the balance of trade equal to zero?

If in an economy,the MTR = 0.2,the MPS = 0.25,and the MPM = 0.15,what is the value of the MPE?

The following data refers to a national economy with all figures in $billions. -Refer to the table above to answer this question.What is the value of the MPC?

-Refer to the data above to answer this question.What is the value of autonomous aggregate expenditures?

Assume that in a particular economy the MPC = 0.64 and the MPM = 0.14. -Refer to the information above to answer this question.What is the value of the multiplier?

What is the formula for the marginal leakage rate?

What is true of unplanned investment?

Assume that in a particular economy the MPC = 0.64 and the MPM = 0.14. -Refer to the graph to answer this question.What is the value of the multiplier?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Fiscal Policy

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters