Question 1

What variable is changed to derive an aggregate demand curve from the expenditures equilibrium diagram?

Accepted Answer

A) Real output. 
B) National income. 
C) The price level. 
D) The interest rate. 
E) Autonomous expenditures. 
A) Real output. 
B) National income. 
C) The price level. 
D) The interest rate. 
E) Autonomous expenditures.

Question 2

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

Accepted Answer

A) XN = 300. 
B) XN = 400 - 300Y. 
C) XN = 300 - 50Y. 
D) XN = 300 + 0.1Y. 
E) XN = 300 - 0.1Y. 
A) XN = 300. 
B) XN = 400 - 300Y. 
C) XN = 300 - 50Y. 
D) XN = 300 + 0.1Y. 
E) XN = 300 - 0.1Y.

Question 3

-Refer to the information above to answer this question.What is the value of autonomous consumption?

Accepted Answer

A) 0 
B) $40 
C) $60 
D) $80 
E) $340 
A) 0 
B) $40 
C) $60 
D) $80 
E) $340

Question 4

The real-balances effect refers to the effect that a change in interest rates has on the real value of wealth.

Accepted Answer

A) True 
 B)False

Question 5

MPC = 0.9;MPM = 0.2
-Refer to the above information to answer this question.What is the value of the MPE?

Accepted Answer

A) 0.1. 
B) 0.3. 
C) 0.5 
D) 0.7. 
A) 0.1. 
B) 0.3. 
C) 0.5 
D) 0.7.

Question 6

How is savings defined?

Accepted Answer

A) S = Y + C 
B) S = C - Y 
C) S = Y/C 
D) S = Y - C 
A) S = Y + C 
B) S = C - Y 
C) S = Y/C 
D) S = Y - C

Question 7

If taxes increase,disposable income will fall but consumption will remain the same.

Accepted Answer

A) True 
 B)False

Question 8

Refer to the figure above to answer this question.All of the following except one could cause a change from a to c.Which is the exception?

Accepted Answer

A) An increase in Canadian income. 
B) A decrease in interest rates. 
C) A decrease in the Canadian exchange rate. 
D) A decrease in autonomous taxes. 
E) An increase in U.S.income. 
A) An increase in Canadian income. 
B) A decrease in interest rates. 
C) A decrease in the Canadian exchange rate. 
D) A decrease in autonomous taxes. 
E) An increase in U.S.income.

Question 9

If the MPE is equal to 0.6,what is the value of the multiplier?

Accepted Answer

A) 0.4. 
B) 0.6. 
C) 1.66. 
D) 2.5 
A) 0.4. 
B) 0.6. 
C) 1.66. 
D) 2.5

Question 10

-Refer to the graph above to answer this question.Suppose that G equals $650,I equals $380 and X equals $170.What is the value of equilibrium income?

Accepted Answer

A) 0. 
B) $500. 
C) $1,200 
D) $1,400. 
E) $1,600. 
A) 0. 
B) $500. 
C) $1,200 
D) $1,400. 
E) $1,600.

Question 11

What happens to the value of net exports as national income increase? Why?

Accepted Answer

The value of net exports declines as nat

Question 12

Autonomous spending depends on the level of income,whereas induced spending does not.

Accepted Answer

A) True 
 B)False

Question 13

Equilibrium income occurs where the value of production is equal to aggregate expenditures.

Accepted Answer

A) True 
 B)False

Question 14

A decrease in the interest rate will cause an increase in investment spending.

Accepted Answer

A) True 
 B)False

Question 15

What does the real-balances effect refer to?

Accepted Answer

A) The effect that a change in savings has on the real rate of interest. 
B) The level of income where it is exactly equal to the level of consumption. 
C) The effect that a change in interest rates has on the real value of savings. 
D) The effect that a change in the price level has on the real value of wealth. 
E) The effect of a change in consumption on the real value of wealth. 
A) The effect that a change in savings has on the real rate of interest. 
B) The level of income where it is exactly equal to the level of consumption. 
C) The effect that a change in interest rates has on the real value of savings. 
D) The effect that a change in the price level has on the real value of wealth. 
E) The effect of a change in consumption on the real value of wealth.

Question 16

The economy of Altus has the following parameters:
Autonomous exports = $290 billion.
Autonomous imports = $75;MPM = 0.20.
(a)What is the balance of trade at an income of $900.
(b)What is the balance of trade at an income of $1,200.
(c)At what income is there a zero balance of trade?

Accepted Answer

a)Trade surplus of $

Question 17

The following partial data relates to a national economy (all figures in $billions):
  
-Refer to the above table to answer this question.What is the value of the marginal leakage rate?

Accepted Answer

A) 0 
B) 0.4 
C) 0.6 
D) 1.67 
E) 2.5 
A) 0 
B) 0.4 
C) 0.6 
D) 1.67 
E) 2.5

Question 18

Distinguish between the wealth effect and the real balance effect.

Accepted Answer

The wealth effect is the effect of a cha

Question 19

What is the effect on the multiplier,if there is an increase in
a)MPC
b)MPS
c)MPM
d)MTR

Accepted Answer

a)Multiplier will increase
b)M

Question 20

-Refer to the information above to answer this question.What is the value of the MPS?

Accepted Answer

A) 0.15. 
B) 0.2. 
C) 0.25. 
D) 0.4. 
E) 0.6. 
A) 0.15. 
B) 0.2. 
C) 0.25. 
D) 0.4. 
E) 0.6.

What variable is changed to derive an aggregate demand curve from the expenditures equilibrium diagram?

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

-Refer to the information above to answer this question.What is the value of autonomous consumption?

The real-balances effect refers to the effect that a change in interest rates has on the real value of wealth.

MPC = 0.9;MPM = 0.2 -Refer to the above information to answer this question.What is the value of the MPE?

How is savings defined?

If taxes increase,disposable income will fall but consumption will remain the same.

Refer to the figure above to answer this question.All of the following except one could cause a change from a to c.Which is the exception?

If the MPE is equal to 0.6,what is the value of the multiplier?

-Refer to the graph above to answer this question.Suppose that G equals $650,I equals $380 and X equals $170.What is the value of equilibrium income?

What happens to the value of net exports as national income increase? Why?

Autonomous spending depends on the level of income,whereas induced spending does not.

Equilibrium income occurs where the value of production is equal to aggregate expenditures.

A decrease in the interest rate will cause an increase in investment spending.

What does the real-balances effect refer to?

The economy of Altus has the following parameters: Autonomous exports = $290 billion. Autonomous imports = $75;MPM = 0.20. (a)What is the balance of trade at an income of $900. (b)What is the balance of trade at an income of $1,200. (c)At what income is there a zero balance of trade?

The following partial data relates to a national economy (all figures in $billions): -Refer to the above table to answer this question.What is the value of the marginal leakage rate?

Distinguish between the wealth effect and the real balance effect.

What is the effect on the multiplier,if there is an increase in a)MPC b)MPS c)MPM d)MTR

-Refer to the information above to answer this question.What is the value of the MPS?

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 variable is changed to derive an aggregate demand curve from the expenditures equilibrium diagram?

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

-Refer to the information above to answer this question.What is the value of autonomous consumption?

The real-balances effect refers to the effect that a change in interest rates has on the real value of wealth.

MPC = 0.9;MPM = 0.2 -Refer to the above information to answer this question.What is the value of the MPE?

How is savings defined?

If taxes increase,disposable income will fall but consumption will remain the same.

Refer to the figure above to answer this question.All of the following except one could cause a change from a to c.Which is the exception?

If the MPE is equal to 0.6,what is the value of the multiplier?

-Refer to the graph above to answer this question.Suppose that G equals $650,I equals $380 and X equals $170.What is the value of equilibrium income?

What happens to the value of net exports as national income increase? Why?

Autonomous spending depends on the level of income,whereas induced spending does not.

Equilibrium income occurs where the value of production is equal to aggregate expenditures.

A decrease in the interest rate will cause an increase in investment spending.

What does the real-balances effect refer to?

The economy of Altus has the following parameters: Autonomous exports = $290 billion. Autonomous imports = $75;MPM = 0.20. (a)What is the balance of trade at an income of $900. (b)What is the balance of trade at an income of $1,200. (c)At what income is there a zero balance of trade?

The following partial data relates to a national economy (all figures in $billions): -Refer to the above table to answer this question.What is the value of the marginal leakage rate?

Distinguish between the wealth effect and the real balance effect.

What is the effect on the multiplier,if there is an increase in a)MPC b)MPS c)MPM d)MTR

-Refer to the information above to answer this question.What is the value of the MPS?

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