Can25L3


  • 1
  • Disposable income is $5 billion and planned saving is $1.75 billion. What is the value of planned consumption expenditure?

    $6.75 billion
    $3.25 billion
    0.35
    0.65


  • 2
  • The figure illustrates an economy's consumption function. What is the marginal propensity to consume in this economy?

    can25001.gif

    1.20
    0.70
    1.43
    0.95


  • 3
  • The figure illustrates an economy's consumption function. What is the marginal propensity to save in this economy?

    can25002.gif

    0.30
    0.70
    1.43
    0.20


  • 4
  • The figure illustrates an economy's consumption function. What is autonomous consumption in this economy?

    can25003.gif

    $2.4 million
    $3.8 million
    $0
    $1.0 million


  • 5
  • Real GDP equals $35 billion and aggregate planned expenditure is $10 billion. There is an unplanned _______ in inventories of _______ and real GDP will __________.

    decrease; $25 billion; increase
    decrease; $35 billion; stay the same
    increase; $10 billion; increase
    increase; $25 billion; decrease


  • 6
  • If a $75 billion increase in autonomous expenditure increases equilibrium expenditure by $120 billion, then the multiplier is _______________.

    $45 billion
    0.625
    $120 billion
    1.6


  • 7
  • An economy has no imports and no taxes. The marginal propensity to save is 0.2. A __________ increase in autonomous expenditure increases equilibrium expenditure by $60 billion and the multiplier is _____________.

    $75 billion; 12
    $48 billion; 1.25
    $300 billion; 5
    $12 billion; 5


  • 8
  • The slope of the aggregate expenditure curve decreases when the marginal propensity to consume _______ or the marginal propensity to import _______.

    increases; decreases
    increases; increases
    decreases; decreases
    decreases; increases


  • 9
  • You observe that unplanned inventories are increasing. You predict that there will be _______.

    an expansion
    a trough
    a business cycle
    a recession


  • 10
  • When the economy is at full employment and investment increases, the price level will ________ and in the long run real GDP will__________

    increase; increase
    decrease; not change
    decrease; decrease
    increase; not change


    Please enter your name and press the SEND button