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 save (MPS)in Exhibit 9-6 equals

A) 0.80 or 4/5 B) 0.60 or 3/5 C) 0.40 or 2/5 D) 0.10 or 1/10 E) 0.20 or 1/5 A) 0.80 or 4/5 B) 0.60 or 3/5 C) 0.40 or 2/5 D) 0.10 or 1/10 E) 0.20 or 1/5

Exhibit 9-6 \[\begin{array}{l} \text { (Trillions of Dollars) }\\ \begin{array} { c c c c c c c c c } \begin{array} { c } \text { Real } \\ \text { GDP } \\ ( \mathrm { Y } ) \end{array} & \begin{array} { c } \text { Net } \\ \text { Taxes } \\ \text { (NT) } \end{array} & \begin{array} { c } \text { Dispes } \\ \text {-able } \\ \text { Income } \\ \text { (Y-NT) } \end{array} & \begin{array} { c } \text { Con- } \\ \text { sumption } \\ \text { (C) } \end{array} & \begin{array} { c } \text { Saving } \\ \text { (S) } \end{array} & \begin{array} { c } \text { Planned } \\ \text { Invest- } \\ \text { ment } \\ \text { (I) } \end{array} & \begin{array} { c } \text { Govern- } \\ \text { ment } \\ \text { Purchases } \\ \text { (G) } \end{array} & \begin{array} { c } \text { Net } \\ \text { Exports } \\ \text { (X-M) } \end{array} & \begin{array} { c } \text { Planned } \\ \text { Aggregate } \\ \text { Expenditures } \\ ( \mathrm { C } + \mathrm { I } + \mathrm { G } + ( \mathrm { X } - \mathrm { M } ) \end{array} \\ \hline 5.0 & 1.0 & 4.0 & 3.9 & 0.1 & 1.0 & 1.0 & - 0.7 & 5.2 \\ 5.5 & 1.0 & 4.5 & 4.3 & 0.2 & 1.0 & 1.0 & - 0.7 & 5.6 \\ 6.0 & 1.0 & 5.0 & 4.7 & 0.3 & 1.0 & 1.0 & - 0.7 & 6.0 \\ 6.5 & 1.0 & 5.5 & 5.1 & 0.4 & 1.0 & 1.0 & - 0.7 & 6.4 \\ 7.0 & 1.0 & 6.0 & 5.5 & 0.5 & 1.0 & 1.0 & - 0.7 & 6.8 \end{array} \end{array}\] -In Exhibit 9-6,which group of the following is considered autonomous with respect to income?

A) C,I,(X - M) B) S,I,G,(X - M) C) NT,C,G,(X - M) D) NT,S,I,(X - M) E) I,G,X A) C,I,(X - M) B) S,I,G,(X - M) C) NT,C,G,(X - M) D) NT,S,I,(X - M) E) I,G,X

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

A) has a deficit of $1 trillion B) has a surplus of $1 trillion C) is balanced D) has a deficit of $2 trillion E) has a surplus of $2 trillion A) has a deficit of $1 trillion B) has a surplus of $1 trillion C) is balanced D) has a deficit of $2 trillion E) has a surplus of $2 trillion

Exam 10: Baggregate Expenditure and Aggregate Demand

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 save (MPS)in Exhibit 9-6 equals

(Multiple Choice)

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Question 121

If people spend 2/3 of any extra income they receive,new autonomous spending of $10 causes equilibrium to increase by

(Multiple Choice)

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Question 122

Exhibit 9-9 -In Exhibit 9-9,assume the economy is in equilibrium with real GDP of $5 trillion dollars.If aggregate expenditure (AE)increases by $1 trillion,we would expect the economy's equilibrium real GDP to

(Multiple Choice)

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Question 123

A change in consumers' expectations about the future will shift both the aggregate expenditure curve and the aggregate demand curve.

(True/False)

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Question 124

On the aggregate expenditure graph,if autonomous investment decreases by $10 billion,

(Multiple Choice)

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Question 125

If an economy is in equilibrium when net taxes = $50 trillion,saving = $40 trillion,government purchases = $50 trillion,exports = $30 trillion,and imports = $10 trillion,then planned investment spending must equal

(Multiple Choice)

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Question 126

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 -In Exhibit 9-6,which group of the following is considered autonomous with respect to income?

(Multiple Choice)

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Question 127

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 -In Exhibit 9-6,the government budget

(Multiple Choice)

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Question 128

What does the marginal propensity to consume tell us?

(Multiple Choice)

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Question 129

If current aggregate expenditure equals current production,the economy is in equilibrium.

(True/False)

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Question 130

Movement along the aggregate demand curve may be caused by a change in autonomous investment spending.

(True/False)

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Question 131

An increase in autonomous investment will

(Multiple Choice)

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Question 132

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

(Multiple Choice)

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Question 133

Increases in the marginal propensity to consume,other things constant,

(Multiple Choice)

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Question 134

Suppose that planned autonomous investment increases by $200 billion and that the marginal propensity to consume equals 0.80.The equilibrium level of real GDP will increase by

(Multiple Choice)

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Question 135

The aggregate expenditure line,along with the 45-degree line,determines equilibrium.This model is based on the assumption that

(Multiple Choice)

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Question 136

If the price level decreases,other things constant,people consume

(Multiple Choice)

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Question 137

If there are no unintended changes in inventories,the economy is at its equilibrium level of real GDP demanded.

(True/False)

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Question 138

An increase in the price level will

(Multiple Choice)

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Question 139

An increase in the U.S.price level,other things constant,would

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Question 140

Exam 10: Baggregate Expenditure and Aggregate Demand

If people spend 2/3 of any extra income they receive,new autonomous spending of $10 causes equilibrium to increase by

Exhibit 9-9 -In Exhibit 9-9,assume the economy is in equilibrium with real GDP of $5 trillion dollars.If aggregate expenditure (AE)increases by $1 trillion,we would expect the economy's equilibrium real GDP to

A change in consumers' expectations about the future will shift both the aggregate expenditure curve and the aggregate demand curve.

On the aggregate expenditure graph,if autonomous investment decreases by $10 billion,

If an economy is in equilibrium when net taxes = $50 trillion,saving = $40 trillion,government purchases = $50 trillion,exports = $30 trillion,and imports = $10 trillion,then planned investment spending must equal

What does the marginal propensity to consume tell us?

If current aggregate expenditure equals current production,the economy is in equilibrium.

Movement along the aggregate demand curve may be caused by a change in autonomous investment spending.

An increase in autonomous investment will

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

Increases in the marginal propensity to consume,other things constant,

Suppose that planned autonomous investment increases by $200 billion and that the marginal propensity to consume equals 0.80.The equilibrium level of real GDP will increase by

The aggregate expenditure line,along with the 45-degree line,determines equilibrium.This model is based on the assumption that

If the price level decreases,other things constant,people consume

If there are no unintended changes in inventories,the economy is at its equilibrium level of real GDP demanded.

An increase in the price level will

An increase in the U.S.price level,other things constant,would

The Art and Science of Economic Analysis

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Introduction to Macroeconomics

Tracking the Useconomy

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Aaggregate Expenditure and Aggregate Demand

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understanding Graphs

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