Question 1

What is true of the size of the MPC?

Accepted Answer

A) It is less than zero. 
B) It is greater than one. 
C) It is greater than zero,but less than one. 
D) It is equal to one. 
A) It is less than zero. 
B) It is greater than one. 
C) It is greater than zero,but less than one. 
D) It is equal to one.

Question 2

In the following table,you are given the following parameters for the economy of Patris:
   a)What is the value of expenditures equilibrium?
b)Does the government have a budget surplus or a budget deficit at expenditures equilibrium? What is the value of the budget surplus or deficit?
c)What is the value of the multiplier?

Accepted Answer

a)$1,840
b

Question 3

If the Canadian exchange rate were to appreciate and at the same time the GDP of our major trading partners were to increase,what would be the result?

Accepted Answer

A) Both exports and imports would fall so that net exports will increase. 
B) Imports will increase but exports might increase or decrease so we cannot tell the effect on net exports. 
C) Both exports and imports will increase and net exports will remain the same. 
D) Exports will increase and imports will decrease so that there will be an overall increase in net exports. 
E) Exports will decrease and imports will increase resulting in a decrease in net exports. 
A) Both exports and imports would fall so that net exports will increase. 
B) Imports will increase but exports might increase or decrease so we cannot tell the effect on net exports. 
C) Both exports and imports will increase and net exports will remain the same. 
D) Exports will increase and imports will decrease so that there will be an overall increase in net exports. 
E) Exports will decrease and imports will increase resulting in a decrease in net exports.

Question 4

Which of the following will cause net exports to increase?

Accepted Answer

A) An increase in Canadian prices. 
B) An increase in foreign prices. 
C) A decrease in foreign incomes. 
D) An appreciation in the Canadian dollar. 
A) An increase in Canadian prices. 
B) An increase in foreign prices. 
C) A decrease in foreign incomes. 
D) An appreciation in the Canadian dollar.

Question 5

Distinguish between induced expenditure and autonomous expenditure.

Accepted Answer

Induced expenditure is the portion of ex

Question 6

What does autonomous consumption refer to?

Accepted Answer

A) The level of consumption spending at break-even income. 
B) The level of consumption spending which is independent of the income level. 
C) The level of consumption spending which is independent of the rate of interest. 
D) The amount of consumption spending when saving is zero. 
E) The poverty-line level of consumption. 
A) The level of consumption spending at break-even income. 
B) The level of consumption spending which is independent of the income level. 
C) The level of consumption spending which is independent of the rate of interest. 
D) The amount of consumption spending when saving is zero. 
E) The poverty-line level of consumption.

Question 7

Assume that in a particular economy,the 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 8

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

Accepted Answer

A) 1.67 
B) 2 
C) 2.22 
D) 2.5 
E) 3.33 
A) 1.67 
B) 2 
C) 2.22 
D) 2.5 
E) 3.33

Question 9

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

Accepted Answer

A) AE = 1,200. 
B) AE = 2,500Y. 
C) AE = 1,200 + 0.7Y. 
D) AE = 1,200 + 0.8Y 
E) AE = 1,400 + 0.8Y 
A) AE = 1,200. 
B) AE = 2,500Y. 
C) AE = 1,200 + 0.7Y. 
D) AE = 1,200 + 0.8Y 
E) AE = 1,400 + 0.8Y

Question 10

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

Accepted Answer

A) 0.5 
B) 1 
C) 1.5 
D) 2 
E) 2.5 
A) 0.5 
B) 1 
C) 1.5 
D) 2 
E) 2.5

Question 11

-Refer to the above graph to answer this question.What is the value of aggregate expenditures at an income level of 1,000?

Accepted Answer

A) 800. 
B) 1,000. 
C) 1,100. 
D) 1,200. 
E) 1,500. 
A) 800. 
B) 1,000. 
C) 1,100. 
D) 1,200. 
E) 1,500.

Question 12

Under what circumstance will the aggregate expenditure function shift upwards?

Accepted Answer

A) If the price level rises. 
B) If the price level falls. 
C) If consumer expectations turn pessimistic. 
D) If the age of consumer durables is very low. 
E) If income rises. 
A) If the price level rises. 
B) If the price level falls. 
C) If consumer expectations turn pessimistic. 
D) If the age of consumer durables is very low. 
E) If income rises.

Question 13

All of the following,except one,are determinants of investment spending.Which is the exception?

Accepted Answer

A) The rate of interest. 
B) The purchase price and operating costs of capital. 
C) The level of wealth-holding in the economy. 
D) The age of capital goods. 
E) Business expectations. 
A) The rate of interest. 
B) The purchase price and operating costs of capital. 
C) The level of wealth-holding in the economy. 
D) The age of capital goods. 
E) Business expectations.

Question 14

Explain the uses of an individual's income.
Y = C + S + T

Accepted Answer

Individuals either spend or do

Question 15

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

Accepted Answer

A) 1,000. 
B) 1,200. 
C) 2,500. 
D) 3,000. 
E) 4,000. 
A) 1,000. 
B) 1,200. 
C) 2,500. 
D) 3,000. 
E) 4,000.

Question 16

The following data refers to a national economy with all figures in $billions.
  
-Refer to the table above to answer this question.At equilibrium income what is the value of aggregate expenditures?

Accepted Answer

A) $1,200 
B) $1,400 
C) $1,600 
D) $2,000 
E) $2,400 
A) $1,200 
B) $1,400 
C) $1,600 
D) $2,000 
E) $2,400

Question 17

Assume that the parameters of a particular economy are as follows: MPC = 0.6,MPM = 0.1.What is the value of the multiplier?

Accepted Answer

A) 0.4. 
B) 0.5. 
C) 1.67. 
D) 2. 
E) 2.5. 
A) 0.4. 
B) 0.5. 
C) 1.67. 
D) 2. 
E) 2.5.

Question 18

Which of the following is true of induced spending?

Accepted Answer

A) It rises as income increases. 
B) It is a function of income. 
C) It is zero when income is zero. 
D) It rises as income increase,it is a function of income,and it is zero when income is zero. 
A) It rises as income increases. 
B) It is a function of income. 
C) It is zero when income is zero. 
D) It rises as income increase,it is a function of income,and it is zero when income is zero.

Question 19

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

Accepted Answer

A) 0.25. 
B) 0.4. 
C) 0.6. 
D) 0.8 
E) 100. 
A) 0.25. 
B) 0.4. 
C) 0.6. 
D) 0.8 
E) 100.

Question 20

Which of the following will cause investment spending to increase?

Accepted Answer

A) An increase in the rate of interest. 
B) An increase in the purchase price of capital equipment. 
C) A decrease in wealth holdings in the country. 
D) An increase in the age of capital goods. 
E) A general feeling that the economy might move into a recession. 
A) An increase in the rate of interest. 
B) An increase in the purchase price of capital equipment. 
C) A decrease in wealth holdings in the country. 
D) An increase in the age of capital goods. 
E) A general feeling that the economy might move into a recession.

What is true of the size of the MPC?

If the Canadian exchange rate were to appreciate and at the same time the GDP of our major trading partners were to increase,what would be the result?

Which of the following will cause net exports to increase?

Distinguish between induced expenditure and autonomous expenditure.

What does autonomous consumption refer to?

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

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

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

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

-Refer to the above graph to answer this question.What is the value of aggregate expenditures at an income level of 1,000?

Under what circumstance will the aggregate expenditure function shift upwards?

All of the following,except one,are determinants of investment spending.Which is the exception?

Explain the uses of an individual's income. Y = C + S + T

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

The following data refers to a national economy with all figures in $billions. -Refer to the table above to answer this question.At equilibrium income what is the value of aggregate expenditures?

Assume that the parameters of a particular economy are as follows: MPC = 0.6,MPM = 0.1.What is the value of the multiplier?

Which of the following is true of induced spending?

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

Which of the following will cause investment spending to increase?

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

What is true of the size of the MPC?

If the Canadian exchange rate were to appreciate and at the same time the GDP of our major trading partners were to increase,what would be the result?

Which of the following will cause net exports to increase?

Distinguish between induced expenditure and autonomous expenditure.

What does autonomous consumption refer to?

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

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

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

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

-Refer to the above graph to answer this question.What is the value of aggregate expenditures at an income level of 1,000?

Under what circumstance will the aggregate expenditure function shift upwards?

All of the following,except one,are determinants of investment spending.Which is the exception?

Explain the uses of an individual's income. Y = C + S + T

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

The following data refers to a national economy with all figures in $billions. -Refer to the table above to answer this question.At equilibrium income what is the value of aggregate expenditures?

Assume that the parameters of a particular economy are as follows: MPC = 0.6,MPM = 0.1.What is the value of the multiplier?

Which of the following is true of induced spending?

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

Which of the following will cause investment spending to increase?

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