FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 30: The Aggregate Expenditures Model

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

(Advanced analysis) Answer the question on the basis of the following information for a mixed open economy.The letters Y,C_a,I_g,X_n,G,and T stand for GDP,consumption,gross investment,net exports,government purchases,and net taxes respectively.Figures are in billions of dollars. $\begin{aligned}C _ { a } & = 25 + 0.75 ( Y - T ) \\I _ { g } & = I _ { g 0 } = 50 \\X _ { n } & = X _ { n 0 } = 10 \\G & = G _ { 0 } = 70 \\T & = T _ { 0 } = 30\end{aligned}$ Refer to the information.If the economy's tax schedule was T = .2Y rather than T = T₀ = 30,the equilibrium GDP would be:

A) $387.5.
B) $518.5.
C) $316.
D) $412.

E) B) and D)
F) B) and C)

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

In a mixed open economy,if aggregate expenditures exceed GDP:

A) I_g + X + G = C_a.
B) C_a + I_g + X_n + G < domestic output.
C) I_g > S.
D) I_g + X + G > S_a + M + T.

E) A) and D)
F) A) and B)

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

The level of aggregate expenditures in the private closed economy is determined by the:

Answer the question on the basis of the following information for a private closed economy: $\begin{array}{l}\begin{array} { c c } \underline{\text { Gross Domestic Product } }& \underline{\text { Consumption } }\\\$100& \$ 100 \\200 & 160 \\300 & 220 \\400 & 280 \\500 & 340 \\600 & 440\end{array}\\\begin{array} { c c c } \underline{\text { Expected Rate of Return }} & \underline{\text { Amount of Investment }} \\15 \% & \$ 0 \\12 & 40 \\9 & 80 \\6 & 120 \\3 & 160 \\0 & 200\end{array}\end{array}$ Refer to the information.If the real interest rate is 9 percent,the equilibrium GDP will be:

If government increases its tax revenues by $15 billion and the MPC is 2/3,then we can expect the equilibrium GDP to:

At the equilibrium GDP for a private open economy:

In a private closed economy _____ investment is equal to saving at all levels of GDP and equilibrium occurs only at that level of GDP where _____ investment is equal to saving.

(Advanced analysis) Answer the question on the basis of the following information for a private closed economy,where I_g is gross investment,S is saving,and Y is gross domestic product (GDP) . $\begin{array} { l } I _ { g } = \overline { I _ { g } } = 80 \\\mathrm {~S} = - 80 + 0.4 \mathrm { Y }\end{array}$ Refer to the information.The equilibrium GDP will be:

If the MPC is .50 and the equilibrium GDP is $40 billion below the full-employment GDP,then the size of the recessionary expenditure gap is:

Answer the question on the basis of the following data for a private closed economy. $\begin{array}{l}\text { Possible Levels of Domestic }\\\begin{array} { c c c } \underline{\text { Output and Income (GDP = DI) } }&\underline{ \text { Consumption }} \\\$320& \$ 320 \\330 & 327 \\340 & 334 \\350 & 341 \\360 & 348 \\370 & 355 \\380 & 362\end{array}\end{array}$ Refer to the data for a private closed economy.If gross investment is $12 billion,the equilibrium level of GDP will be:

For a private closed economy,an unintended decline in inventories suggests that:

(Advanced analysis) Answer the question on the basis of the following data for a private closed economy.The letters Y,C,S,and I are used to represent real GDP,consumption,saving,and investment respectively. $\begin{array}{ccc}\underline{\text { GDP }(Y) } & \underline{\text { Consumption (C) }} & \underline{\text { Investment (I) }} \\\$ \$ 0 & \$ 60 & \$ 30 \\100 & 120 & 40 \\200 & 180 & 50 \\300 & 240 & 60 \\400 & 300 & 70 \\500 & 360 & 80\end{array}$ The equation representing the investment schedule for the economy is:

In a mixed closed economy:

A $10 billion decrease in taxes will increase the equilibrium GDP by more than would a $10 billion increase in government expenditures.

(Advanced analysis) Answer the question on the basis of the following consumption and investment data for a private closed economy.Figures are in billions of dollars. C = 60 + .6Y I = I₀ = 30 Refer to the data.The equilibrium level of income (Y) is:

(Advanced analysis) Answer the question on the basis of the following information for a private closed economy,where I_g is gross investment,S is saving,and Y is gross domestic product (GDP) . $\begin{array} { l } I _ { g } = \overline { I _ { g } } = 80 \\\mathrm {~S} = - 80 + 0.4 \mathrm { Y }\end{array}$ Refer to the information.In equilibrium saving will be:

In a private closed economy,when aggregate expenditures exceed GDP:

In which of the following situations for a mixed open economy will the level of GDP expand?

Other things equal,a serious recession in the economies of U.S.trading partners will:

In an aggregate expenditures diagram,equal increases in government spending and in lump-sum taxes will: