Question 1

-The above table gives data for the nation of South Hampton.There are no imports into or exports from South Hampton.Aggregate planned expenditure is less than actual expenditure if real GDP is

Accepted Answer

A)  more than $700 billion.
B)  at the equilibrium level.
C)  less than $700 billion.
D)  $700 billion.
E)  Both answers A and C are correct.F) D) and E)
G) C) and D)

Question 2

The equilibrium level of aggregate planned expenditure is found where

Accepted Answer

A)  there is no saving and no dissaving.
B)  the price level is rising at a constant rate.
C)  autonomous expenditure equals equilibrium expenditure.
D)  aggregate planned expenditure equals real GDP.
E)  net exports is zero.F) A) and E)
G) A) and C)

Question 3

When the price level ________,equilibrium expenditure ________ and the quantity of real GDP demanded ________.

Accepted Answer

A)  rises;increases;decreases
B)  rises;decreases;increases
C)  falls;increases;decreases
D)  rises;increases;increases
E)  falls;increases;increasesF) A) and D)
G) B) and C)

Question 4

-In the figure above,what is the MPC?

Accepted Answer

A)  0.50
B)  1.00
C)  0.75
D)  0.90
E)  0.80F) B) and D)
G) B) and C)

Question 5

When aggregate planned expenditure exceeds real GDP,there are unplanned ________ in inventories,and firms ________ production,so that real GDP ________.

Accepted Answer

A)  decreases;increase;increases
B)  decreases;decrease;increases
C)  decreases;decrease;decreases
D)  increases;increase;increases
E)  increases;decrease;decreasesF) C) and D)
G) B) and E)

Question 6

If the slope of the aggregate expenditure curve is 0.75,the expenditure multiplier is equal to

Accepted Answer

A)  4.00.
B)  0.25.
C)  5.00.
D)  1.33.
E)  0.75.F) B) and D)
G) A) and B)

Question 7

A change in the price level ________ the AE curve and ________ the AD curve.

Accepted Answer

A)  shifts;results in a movement along
B)  has no effect on;results in a movement along
C)  results in a movement along;shifts
D)  shifts;shifts
E)  results in a movement along;results in a movement alongF) None of the above
G) A) and E)

Question 8

As a household's disposable income increases,its autonomous expenditures ________ and its induced expenditures ________.

Accepted Answer

A)  decrease;do not change
B)  do not change;increase by a smaller amount than the increase in income
C)  do not change;increase by an amount equal to the increase in income
D)  increase;do not change
E)  increase;increase by a smaller amount than the increase in incomeF) B) and E)
G) B) and D)

Question 9

-The above table has data from the nation of Atlantica.Based on these data,what is the marginal propensity to consume?

Accepted Answer

A)  1.00
B)  1.50
C)  0.50
D)  1.33
E)  0.75F) C) and E)
G) A) and B)

Question 10

-The figure above shows a nation's consumption function.If disposable income is $4 trillion,then the MPC is ________ and saving is ________.

Accepted Answer

A)  positive;zero
B)  negative;positive
C)  negative;negative
D)  positive;positive
E)  positive;negativeF) All of the above
G) C) and D)

Question 11

Which of the following is NOT a part of aggregate expenditure?

Accepted Answer

A)  Government expenditure
B)  Exports
C)  Imports
D)  Taxes
E)  InvestmentF) A) and B)
G) A) and E)

Question 12

-The table above gives data for the nation of Mosh.The amount of autonomous expenditure is

Accepted Answer

A)  $9.0 trillion.
B)  $4.5 trillion.
C)  $4 trillion.
D)  $1.5 trillion.
E)  not shown in this table.F) A) and D)
G) A) and C)

Question 13

Real GDP is $13 trillion and aggregate planned expenditure is $14 trillion.As a result,unplanned inventory change is ________ and real GDP ________.

Accepted Answer

A)  negative;decreases
B)  negative;does not change
C)  positive;increases
D)  positive;decreases
E)  negative;increasesF) C) and E)
G) D) and E)

Question 14

The marginal propensity to consume equals

Accepted Answer

A)  consumption expenditure divided by the change in disposable income.
B)  the change in autonomous consumption divided by the change in induced consumption.
C)  consumption expenditure divided by disposable income.
D)  the change in consumption expenditure divided by the change in disposable income.
E)  the change in consumption expenditure divided by disposable income.F) A) and B)
G) A) and C)

Question 15

-The above table gives data for the nation of South Hampton.There are no imports into or exports from South Hampton.If real GDP is equal to $900 billion,then

Accepted Answer

A)  aggregate planned expenditure will need to decrease to reach the equilibrium.
B)  aggregate planned expenditure is equal to real GDP.
C)  aggregate planned expenditure is less than real GDP.
D)  this is the equilibrium level of real GDP.
E)  aggregate planned expenditure is greater than real GDP.F) A) and E)
G) A) and C)

Question 16

The figure above shows two aggregate expenditure lines.
-In the figure above,if the marginal propensity to import increased,the aggregate expenditure lines would ________ and the multiplier would ________ in value.

Accepted Answer

A)  become less steep;fall
B)  become less steep;rise
C)  not change;fall
D)  become steeper;rise
E)  not change;riseF) B) and C)
G) A) and D)

Question 17

The figure above shows two aggregate expenditure lines.
-In the figure above,what is the size of the multiplier?

Accepted Answer

A)  4.0
B)  0.25
C)  $2 trillion
D)  $0.5 trillion
E)  More information is needed to determine the size of the multiplier.F) A) and B)
G) None of the above

Question 18

The components of aggregate expenditure that are NOT influenced by GDP are known as

Accepted Answer

A)  induced expenditure.
B)  planned expenditure.
C)  fixed expenditure.
D)  autonomous expenditure.
E)  unplanned expenditure.F) None of the above
G) A) and C)

Question 19

The AE curve illustrates the relationship between

Accepted Answer

A)  the quantity of real GDP demanded and the price level.
B)  the interest rate and aggregate planned expenditure.
C)  real GDP and the interest rate.
D)  aggregate planned expenditure and real GDP.
E)  real GDP and actual expenditure.F) All of the above
G) B) and E)

Question 20

________ shifts the consumption function upward.

Accepted Answer

A)  An increase in expected future disposable income
B)  An increase in the real interest rate
C)  A decrease in the marginal propensity to consume
D)  An increase in the price level
E)  An increase in disposable incomeF) B) and D)
G) D) and E)

Exam 12: Aggregate Expenditure Multiplier

A change in the price level ________ the AE curve and ________ the AD curve.

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When aggregate planned expenditure exceeds real GDP,there are unplanned ________ in inventories,and firms ________ production,so that real GDP ________.

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If the slope of the aggregate expenditure curve is 0.75,the expenditure multiplier is equal to

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-The above table gives data for the nation of South Hampton.There are no imports into or exports from South Hampton.Aggregate planned expenditure is less than actual expenditure if real GDP is

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-In the figure above,what is the MPC?

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Which of the following is NOT a part of aggregate expenditure?

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The AE curve illustrates the relationship between

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As a household's disposable income increases,its autonomous expenditures ________ and its induced expenditures ________.

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The figure above shows two aggregate expenditure lines. -In the figure above,what is the size of the multiplier?

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-The table above gives data for the nation of Mosh.The amount of autonomous expenditure is

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-The above table gives data for the nation of South Hampton.There are no imports into or exports from South Hampton.If real GDP is equal to $900 billion,then

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The marginal propensity to consume equals

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The equilibrium level of aggregate planned expenditure is found where

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The figure above shows two aggregate expenditure lines. -In the figure above,if the marginal propensity to import increased,the aggregate expenditure lines would ________ and the multiplier would ________ in value.

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Real GDP is $13 trillion and aggregate planned expenditure is $14 trillion.As a result,unplanned inventory change is ________ and real GDP ________.

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The components of aggregate expenditure that are NOT influenced by GDP are known as

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-The above table has data from the nation of Atlantica.Based on these data,what is the marginal propensity to consume?

Correct AnswerverifiedShow Answer

When the price level ________,equilibrium expenditure ________ and the quantity of real GDP demanded ________.

Correct AnswerverifiedShow Answer

-The figure above shows a nation's consumption function.If disposable income is $4 trillion,then the MPC is ________ and saving is ________.

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________ shifts the consumption function upward.

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A change in the price level the AE curve and the AD curve.

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When aggregate planned expenditure exceeds real GDP,there are unplanned in inventories,and firms production,so that real GDP .

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As a household's disposable income increases,its autonomous expenditures and its induced expenditures .

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The figure above shows two aggregate expenditure lines. -In the figure above,if the marginal propensity to import increased,the aggregate expenditure lines would and the multiplier would in value.

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Real GDP is $13 trillion and aggregate planned expenditure is $14 trillion.As a result,unplanned inventory change is and real GDP .

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When the price level ,equilibrium expenditure and the quantity of real GDP demanded .

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-The figure above shows a nation's consumption function.If disposable income is $4 trillion,then the MPC is and saving is .

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