CanL1

  • 1

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    The sum of planned consumption expenditure, planned investment, planned government expenditures, and planned net exports is ________________.

    aggregate planned expenditure
    real GDP
    aggregate expenditure
    the expenditure approach to real GDP

  • 2

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    The consumption function is the relationship between consumption expenditure and ___________________, other things remaining the same.

    saving
    potential GDP
    disposable income
    the 45 degree line

  • 3

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    The marginal propensity to consume ____________________.

    is the fraction of GDP consumed
    is the fraction of disposable income consumed
    plus the marginal propensity to save equals 1
    is the amount of disposable income consumed

  • 4

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    The marginal propensity to save is _____________.

    equal to the slope of the saving function
    equal to the inverse of the marginal propensity to consume
    equal to 1 plus the slope of the consumption function
    always greater than the marginal propensity to consume

  • 5

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    The marginal propensity to import is _______ that is spent on imports.

    the fraction of an increase in potential GDP
    the amount of real GDP
    the fraction of an increase in real GDP
    the amount of potential GDP

  • 6

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    The part of aggregate planned expenditure that does not vary with real GDP _______________.

    equals equilibrium expenditure
    is induced expenditure
    is autonomous expenditure
    equals zero

  • 7

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    Induced expenditure includes ______________________.

    induced consumption and government expenditures
    autonomous expenditure
    induced consumption expenditure minus imports
    induced consumption expenditure plus imports

  • 8

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    All of the following statements about equilibrium expenditure are true except:

    Unplanned inventory investment is zero.
    Actual investment is less than planned investment.
    Aggregate planned expenditure equals real GDP.
    Aggregate planned expenditure equals actual expenditure.

  • 9

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    The multiplier is the amount by which ____________________ is multiplied to determine __________________.

    induced expenditure; real GDP
    the change in induced expenditure; the change in potential GDP
    the change in autonomous expenditure; the change in real GDP
    autonomous expenditure; real GDP

  • 10

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    The multiplier is greater than 1 because the change in autonomous expenditure leads to ______________.

    less consumption expenditure
    more induced expenditure
    more saving
    more investment

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