Question 1

When PAE increases, we expect that the economy will be at _______ levels of equilibrium GDP.

Accepted Answer

A)   lower
B)   higher
C)   constant
D)   cyclingE) B) and C)
F) A) and D)

Question 2

Which of the following terms is not a common alternative economists use to refer to GDP?

Accepted Answer

A)   Net national income
B)   Total output
C)   National income
D)   Aggregate expenditureE) B) and D)
F) All of the above

Question 3

Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much money will he save?

Accepted Answer

A)   $10,000
B)   $40,000
C)   $12,000
D)   $8,000E) A) and B)
F) C) and D)

Question 4

Economist John Maynard Keynes noted that:

Accepted Answer

A)   firms may not produce all they can at a given price, but rather what they can sell.
B)   firms generally produce as much as they can at a given price.
C)   government spending needs to be kept in check in order for the economy to operate efficiently.
D)   household spending patterns don't really influence the health of the economy.E) A) and B)
F) A) and D)

Question 5

The figure shows planned aggregate expenditure and output for an economy. 3, we would expect there to be _______ in production because PAE is _______ actual output. A)  an increase; less than B)  an increase; greater than C)  no change; equal to D)  a decrease; less than" class="answers-bank-image d-inline" rel="preload" > If output in this economy is Y3, we would expect there to be _______ in production because PAE is _______ actual output.

Accepted Answer

A)   an increase; less than
B)   an increase; greater than
C)   no change; equal to
D)   a decrease; less thanE) None of the above
F) C) and D)

Question 6

20. Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much will he spend on non-necessities?

Accepted Answer

A)   $10,000
B)   $40,000
C)   $32,000
D)   $35,000E) None of the above
F) B) and D)

Question 7

The table shown displays the spending habits of three coworkers.  Who has the highest MPC?

Accepted Answer

A)   Mary
B)   Chris
C)   Steve
D)   There is not enough information to answer this question.E) A) and B)
F) None of the above

Question 8

If the expected profitability of a business activity increases, we would expect investment spending to:

Accepted Answer

A)   increase.
B)   decrease.
C)   remain constant.
D)   There is not enough information to determine what would happen.E) C) and D)
F) A) and B)

Question 9

If foreign income decreases, net exports will likely:

Accepted Answer

A)   increase.
B)   decrease.
C)   remain constant.
D)   There is not enough information to determine what will happen.E) A) and B)
F) A) and C)

Question 10

The multiplier measures the:

Accepted Answer

A)   effect of government spending or tax cuts on national income.
B)   number of times each dollar is spent in the economy.
C)   supply of money in the economy.
D)   effect of household spending on national income.E) None of the above
F) B) and D)

Question 11

The multiplier effect occurs when:

Accepted Answer

A)   spending by one person generates income for others and causes them to spend more too.
B)   the level of consumer confidence increases more than predicted given a tax cut.
C)   increased spending by one or more individuals causes others to increase their savings.
D)   None of these are true.E) B) and D)
F) A) and B)

Question 12

Which of the following is not a direct determinant of net export spending?

Accepted Answer

A)   Domestic income
B)   Foreign income
C)   Interest rates
D)   Exchange ratesE) A) and B)
F) A) and C)

Question 13

Which of the following components has a negative or indirect relationship with consumption?

Accepted Answer

A)   Expected future income
B)   Real income
C)   Wealth
D)   Interest ratesE) B) and C)
F) A) and D)

Question 14

Which component of aggregate expenditure is neutral to macroeconomic changes?

Accepted Answer

A)   Consumption
B)   Investment
C)   Government
D)   Net exportsE) A) and D)
F) B) and C)

Exam 11: Aggregateexpenditures

If the expected profitability of a business activity increases, we would expect investment spending to:

Correct Answer
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The multiplier measures the:

Correct Answer
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Economist John Maynard Keynes noted that:

Correct Answer
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When PAE increases, we expect that the economy will be at _______ levels of equilibrium GDP.

Correct Answer
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The figure shows planned aggregate expenditure and output for an economy. If output in this economy is Y₃, we would expect there to be _ in production because PAE is _ actual output.

Correct Answer
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Which component of aggregate expenditure is neutral to macroeconomic changes?

Correct Answer
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Which of the following is not a direct determinant of net export spending?

Correct Answer
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If foreign income decreases, net exports will likely:

Correct Answer
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The multiplier effect occurs when:

Correct Answer
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The table shown displays the spending habits of three coworkers. Who has the highest MPC?

Correct Answer
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Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much money will he save?

Correct Answer
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20_.Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much will he spend on non-necessities?

Correct Answer
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Which of the following terms is not a common alternative economists use to refer to GDP?

Correct Answer
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Which of the following components has a negative or indirect relationship with consumption?

Correct Answer
verified

Exam 11: Aggregateexpenditures

If the expected profitability of a business activity increases, we would expect investment spending to:

Correct AnswerverifiedShow Answer

The multiplier measures the:

Correct AnswerverifiedShow Answer

Economist John Maynard Keynes noted that:

Correct AnswerverifiedShow Answer

When PAE increases, we expect that the economy will be at _______ levels of equilibrium GDP.

Correct AnswerverifiedShow Answer

The figure shows planned aggregate expenditure and output for an economy. If output in this economy is Y3, we would expect there to be _______ in production because PAE is _______ actual output.

Correct AnswerverifiedShow Answer

Which component of aggregate expenditure is neutral to macroeconomic changes?

Correct AnswerverifiedShow Answer

Which of the following is not a direct determinant of net export spending?

Correct AnswerverifiedShow Answer

If foreign income decreases, net exports will likely:

Correct AnswerverifiedShow Answer

The multiplier effect occurs when:

Correct AnswerverifiedShow Answer

The table shown displays the spending habits of three coworkers. Who has the highest MPC?

Correct AnswerverifiedShow Answer

Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much money will he save?

Correct AnswerverifiedShow Answer

20. Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much will he spend on non-necessities?

Correct AnswerverifiedShow Answer

Which of the following terms is not a common alternative economists use to refer to GDP?

Correct AnswerverifiedShow Answer

Which of the following components has a negative or indirect relationship with consumption?

Correct AnswerverifiedShow Answer

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The figure shows planned aggregate expenditure and output for an economy. If output in this economy is Y₃, we would expect there to be _ in production because PAE is _ actual output.

Correct Answer
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Correct Answer
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20_.Suppose that John earns a disposable annual income of $50,000 and allocates $10,000 of this for necessities. Any additional income beyond that is both spent and saved. If John's MPC is 0.8, how much will he spend on non-necessities?

Correct Answer
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Correct Answer
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Correct Answer
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