Question 1

If the multiplier in an economy is 5, a $20 billion increase in net exports will:

Accepted Answer

A)   increase GDP by $100 billion.
B)   reduce GDP by $20 billion.
C)   decrease GDP by $100 billion.
D)   increase GDP by $20 billion.E) A) and D)
F) B) and C)

Question 2

Refer to the above diagram for a private closed economy. At the $300 level of GDP:

Accepted Answer

A)   aggregate expenditures and GDP are equal.
B)   consumption is $250 and planned investment is $50.
C)   saving equals investment.
D)   all of the above are true.E) B) and C)
F) None of the above

Question 3

4. B)  Y3. C)  Y2. D)  Y1." class="answers-bank-image d-inline" rel="preload" >
-The equilibrium level of GDP for the above private open economy is:

Accepted Answer

A)   Y4.
B)   Y3.
C)   Y2.
D)   Y1.E) A) and B)
F) A) and C)

Question 4

For an open mixed economy the equilibrium level of GDP is determined where
Sa + Ig + X = T +
G.

Accepted Answer

A) True 
 B)False

Question 5

For given data the aggregate expenditures-domestic output and the saving-investment approaches will yield the same equilibrium level of GDP.

Accepted Answer

A) True 
 B)False

Question 6

-Refer to the above information. When the real interest rate is 10 percent, unplanned changes in inventories are equal to:

Accepted Answer

A)   $40.
B)   -$30.
C)   $20.
D)   -$60.E) A) and B)
F) None of the above

Question 7

In a private closed economy (a)  the marginal propensity to save is 0.25, (b)  consumption equals income when consumption is $120 billion, and (c)  the level of investment is $40 billion. What is the equilibrium level of income?

Accepted Answer

A)   $280 billion
B)   $320 billion
C)   $262 billion
D)   $198 billionE) A) and D)
F) None of the above

Question 8

The following information is for a private closed economy, where Ig is gross investment, S is saving, and Y is gross domestic product (GDP) .
Ig = 80
S = -80 + .4Y
-Refer to the above information. The equilibrium GDP will be:

Accepted Answer

A)   $160.
B)   $400.
C)   $360.
D)   $480.E) B) and C)
F) A) and B)

Question 9

Refer to the above information. In equilibrium, the level of consumption is:

Accepted Answer

A)   $230.
B)   $320.
C)   $400.
D)   $150.E) A) and B)
F) A) and D)

Question 10

The effect of imposing a lump-sum tax is to:

Accepted Answer

A)   reduce the absolute levels of consumption and saving at each level of GDP and to reduce the size of the multiplier.
B)   reduce the absolute levels of consumption and saving at each level of GDP, but to not change the size of the multiplier.
C)   reduce the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier.
D)   increase the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier.E) C) and D)
F) B) and C)

Question 11

Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion. If the MPC is 0.6, what change in aggregate expenditures is needed to achieve full employment?

Accepted Answer

A)   a decrease of $24 billion
B)   an increase of $24 billion
C)   a decrease of $16 billion
D)   an increase of $16 billionE) C) and D)
F) A) and B)

Question 12

If net exports decrease from zero to some negative amount, the aggregate expenditures schedule would:

Accepted Answer

A)   shift upward.
B)   shift downward.
C)   not move (net exports do not affect aggregate expenditures) .
D)   shift upward or downward, depending on whether the negative net exports resulted from a decline in exports or an increase in imports.E) B) and C)
F) A) and D)

Question 13

In reality, if a nation imposes tariffs, then the final result will be that net exports and GDP will decrease.

Accepted Answer

A) True 
 B)False

Question 14

In a mixed open economy the equilibrium level of GDP exists where:

Accepted Answer

A)   Ca + Ig + Xn intersects the 45-degree line.
B)   Ca + Ig = Sa + T + X.
C)   Ca + Ig + Xn + G = GDP.
D)   Ca + Ig + Xn = Sa + T.E) A) and B)
F) None of the above

Question 15

-Refer to the above diagram. In equilibrium net exports are positive.

Accepted Answer

A) True 
 B)False

Exam 9: The Aggregate Expenditures Model

-Refer to the above information. When the real interest rate is 10 percent, unplanned changes in inventories are equal to:

Correct Answer
verified

-The equilibrium level of GDP for the above private open economy is:

Correct Answer
verified

Refer to the above diagram for a private closed economy. At the $300 level of GDP:

Correct Answer
verified

In reality, if a nation imposes tariffs, then the final result will be that net exports and GDP will decrease.

Correct Answer
verified

For an open mixed economy the equilibrium level of GDP is determined where S_a + I_g + X = T + G.

Correct Answer
verified

For given data the aggregate expenditures-domestic output and the saving-investment approaches will yield the same equilibrium level of GDP.

Correct Answer
verified

Refer to the above information. In equilibrium, the level of consumption is:

Correct Answer
verified

If the multiplier in an economy is 5, a $20 billion increase in net exports will:

Correct Answer
verified

Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion. If the MPC is 0.6, what change in aggregate expenditures is needed to achieve full employment?

Correct Answer
verified

The following information is for a private closed economy, where I_g is gross investment, S is saving, and Y is gross domestic product (GDP) . I_g = 80 S = -80 + .4Y -Refer to the above information. The equilibrium GDP will be:

Correct Answer
verified

In a private closed economy (a) the marginal propensity to save is 0.25, (b) consumption equals income when consumption is $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of income?

Correct Answer
verified

In a mixed open economy the equilibrium level of GDP exists where:

Correct Answer
verified

If net exports decrease from zero to some negative amount, the aggregate expenditures schedule would:

Correct Answer
verified

-Refer to the above diagram. In equilibrium net exports are positive.

Correct Answer
verified

The effect of imposing a lump-sum tax is to:

Correct Answer
verified

Exam 9: The Aggregate Expenditures Model

-Refer to the above information. When the real interest rate is 10 percent, unplanned changes in inventories are equal to:

Correct AnswerverifiedShow Answer

-The equilibrium level of GDP for the above private open economy is:

Correct AnswerverifiedShow Answer

Refer to the above diagram for a private closed economy. At the $300 level of GDP:

Correct AnswerverifiedShow Answer

In reality, if a nation imposes tariffs, then the final result will be that net exports and GDP will decrease.

Correct AnswerverifiedShow Answer

For an open mixed economy the equilibrium level of GDP is determined where Sa + Ig + X = T + G.

Correct AnswerverifiedShow Answer

For given data the aggregate expenditures-domestic output and the saving-investment approaches will yield the same equilibrium level of GDP.

Correct AnswerverifiedShow Answer

Refer to the above information. In equilibrium, the level of consumption is:

Correct AnswerverifiedShow Answer

If the multiplier in an economy is 5, a $20 billion increase in net exports will:

Correct AnswerverifiedShow Answer

Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion. If the MPC is 0.6, what change in aggregate expenditures is needed to achieve full employment?

Correct AnswerverifiedShow Answer

The following information is for a private closed economy, where Ig is gross investment, S is saving, and Y is gross domestic product (GDP) . Ig = 80 S = -80 + .4Y -Refer to the above information. The equilibrium GDP will be:

Correct AnswerverifiedShow Answer

In a private closed economy (a) the marginal propensity to save is 0.25, (b) consumption equals income when consumption is $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of income?

Correct AnswerverifiedShow Answer

In a mixed open economy the equilibrium level of GDP exists where:

Correct AnswerverifiedShow Answer

If net exports decrease from zero to some negative amount, the aggregate expenditures schedule would:

Correct AnswerverifiedShow Answer

-Refer to the above diagram. In equilibrium net exports are positive.

Correct AnswerverifiedShow Answer

The effect of imposing a lump-sum tax is to:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

For an open mixed economy the equilibrium level of GDP is determined where S_a + I_g + X = T + G.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The following information is for a private closed economy, where I_g is gross investment, S is saving, and Y is gross domestic product (GDP) . I_g = 80 S = -80 + .4Y -Refer to the above information. The equilibrium GDP will be:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified