Exhibit 9-6 \[\begin{array}{l} \text { (Trillions of Dollars) }\\ \begin{array} { c c c c c c c c c } \begin{array} { c } \text { Real } \\ \text { GDP } \\ ( \mathrm { Y } ) \end{array} & \begin{array} { c } \text { Net } \\ \text { Taxes } \\ \text { (NT) } \end{array} & \begin{array} { c } \text { Dispes } \\ \text {-able } \\ \text { Income } \\ \text { (Y-NT) } \end{array} & \begin{array} { c } \text { Con- } \\ \text { sumption } \\ \text { (C) } \end{array} & \begin{array} { c } \text { Saving } \\ \text { (S) } \end{array} & \begin{array} { c } \text { Planned } \\ \text { Invest- } \\ \text { ment } \\ \text { (I) } \end{array} & \begin{array} { c } \text { Govern- } \\ \text { ment } \\ \text { Purchases } \\ \text { (G) } \end{array} & \begin{array} { c } \text { Net } \\ \text { Exports } \\ \text { (X-M) } \end{array} & \begin{array} { c } \text { Planned } \\ \text { Aggregate } \\ \text { Expenditures } \\ ( \mathrm { C } + \mathrm { I } + \mathrm { G } + ( \mathrm { X } - \mathrm { M } ) \end{array} \\ \hline 5.0 & 1.0 & 4.0 & 3.9 & 0.1 & 1.0 & 1.0 & - 0.7 & 5.2 \\ 5.5 & 1.0 & 4.5 & 4.3 & 0.2 & 1.0 & 1.0 & - 0.7 & 5.6 \\ 6.0 & 1.0 & 5.0 & 4.7 & 0.3 & 1.0 & 1.0 & - 0.7 & 6.0 \\ 6.5 & 1.0 & 5.5 & 5.1 & 0.4 & 1.0 & 1.0 & - 0.7 & 6.4 \\ 7.0 & 1.0 & 6.0 & 5.5 & 0.5 & 1.0 & 1.0 & - 0.7 & 6.8 \end{array} \end{array}\] -The marginal propensity to consume (MPC)in Exhibit 9-6 equals

A) 0.20 or 1/5 B) 0.40 or 2/5 C) 0.80 or 4/5 D) 0.90 or 9/10 E) 0.60 or 3/5 A) 0.20 or 1/5 B) 0.40 or 2/5 C) 0.80 or 4/5 D) 0.90 or 9/10 E) 0.60 or 3/5

Exam 10: Baggregate Expenditure and Aggregate Demand

If an increase in planned investment of $70 billion causes equilibrium output demanded to rise by $280 billion,the value of the marginal propensity to consume is

(Multiple Choice)

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Question 21

An increase in the price level will

(Multiple Choice)

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Question 22

Exhibit 9-9 -The smaller the marginal propensity to save,other things constant,

(Multiple Choice)

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Question 23

If the marginal propensity to save is 1/8,the value of the simple multiplier is

(Multiple Choice)

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Question 24

We can use an aggregate expenditure line to show how an aggregate demand curve shifts by

(Multiple Choice)

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Question 25

Which of the following best describes the multiplier?

(Multiple Choice)

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Question 26

A decrease in the price level will have which of the following effects?

(Multiple Choice)

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Question 27

A fall in the price level will shift the aggregate expenditure curve

(Multiple Choice)

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Question 28

The aggregate demand curve slopes downward to the right,reflecting a relationship between the price level and

(Multiple Choice)

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Question 29

In the income-expenditure framework,if planned aggregate expenditures are less than real GDP,

(Multiple Choice)

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Question 30

Exhibit 9-9 -The larger the marginal propensity to save,other things constant,

(Multiple Choice)

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Question 31

To simplify the aggregate expenditure model,we assume that there is no

(Multiple Choice)

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Question 32

Consumption plus saving equals disposable income at every level of real GDP demanded.

(True/False)

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Question 33

Which of the following is illustrated by the distance between the aggregate expenditure line and the 45-degree line at each level of real GDP?

(Multiple Choice)

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Question 34

Which of the following is true about the relationship between the aggregate demand curve and the aggregate expenditure line?

(Multiple Choice)

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Question 35

Exhibit 9-10 -According to the graph in Exhibit 9-10,if the price level decreases,the new equilibrium level of real GDP must be

(Multiple Choice)

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Question 36

Exhibit 9-6 (Trillions of Dollars) Real GDP () Net Taxes (NT) Dispes -able Income (Y-NT) Con- sumption (C) Saving (S) Planned Invest- ment (I) Govern- ment Purchases (G) Net Exports (X-M) Planned Aggregate Expenditures (+++(-) 5.0 1.0 4.0 3.9 0.1 1.0 1.0 -0.7 5.2 5.5 1.0 4.5 4.3 0.2 1.0 1.0 -0.7 5.6 6.0 1.0 5.0 4.7 0.3 1.0 1.0 -0.7 6.0 6.5 1.0 5.5 5.1 0.4 1.0 1.0 -0.7 6.4 7.0 1.0 6.0 5.5 0.5 1.0 1.0 -0.7 6.8 -The marginal propensity to consume (MPC)in Exhibit 9-6 equals

(Multiple Choice)

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Question 37

Which of the following is assumed constant along the aggregate expenditure line?

(Multiple Choice)

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Question 38

What is the effect of an increase in the price level?

(Multiple Choice)

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Question 39

If households save $40 billion less at each level of income and the MPC = 0.8,the aggregate expenditure line will

(Multiple Choice)

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Question 40

Exam 10: Baggregate Expenditure and Aggregate Demand

If an increase in planned investment of $70 billion causes equilibrium output demanded to rise by $280 billion,the value of the marginal propensity to consume is

An increase in the price level will

Exhibit 9-9 -The smaller the marginal propensity to save,other things constant,

If the marginal propensity to save is 1/8,the value of the simple multiplier is

We can use an aggregate expenditure line to show how an aggregate demand curve shifts by

Which of the following best describes the multiplier?

A decrease in the price level will have which of the following effects?

A fall in the price level will shift the aggregate expenditure curve

The aggregate demand curve slopes downward to the right,reflecting a relationship between the price level and

In the income-expenditure framework,if planned aggregate expenditures are less than real GDP,

Exhibit 9-9 -The larger the marginal propensity to save,other things constant,

To simplify the aggregate expenditure model,we assume that there is no

Consumption plus saving equals disposable income at every level of real GDP demanded.

Which of the following is illustrated by the distance between the aggregate expenditure line and the 45-degree line at each level of real GDP?

Which of the following is true about the relationship between the aggregate demand curve and the aggregate expenditure line?

Exhibit 9-10 -According to the graph in Exhibit 9-10,if the price level decreases,the new equilibrium level of real GDP must be

Which of the following is assumed constant along the aggregate expenditure line?

What is the effect of an increase in the price level?

If households save $40 billion less at each level of income and the MPC = 0.8,the aggregate expenditure line will

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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