Can25L4


  • 1
  • The table gives the components of aggregate planned expenditure in the economy of Sher. Equilibrium expenditure occurs when real GDP equals ____________________.

    can25001.gif

    $2.0 billion
    $2.5 billion
    $3.0 billion
    $5.0 billion


  • 2
  • The table gives the components of aggregate planned expenditure in the economy of Sher. Autonomous expenditure is ___________ and the slope of the aggregate expenditure curve is __________.

    can25002.gif

    $0.9 billion; 0.7
    zero; 0.3
    $3.0 billion; 0.7
    $2.4 billion; 0.3


  • 3
  • The table gives the components of aggregate planned expenditure in the economy Sher. If investment increases by $0.3 billion, equilibrium expenditure increases to _____________ and the multiplier is _______________.

    can25003.gif

    $4.0 billion; 10/3
    $3.5 billion; 5/3
    $3.0 billion; 0
    $2.0 billion; -10/3


  • 4
  • The table gives the components of aggregate planned expenditure in the economy Sher. The multiplier is __________, and for equilibrium expenditure to decrease by $1 billion, autonomous expenditure must decrease by ______________.

    can25004.gif

    3.3; $0.3 billion
    1.0; $1.0 billion
    zero; $1.0 billion
    0.3; $0.3 billion


  • 5
  • The figure shows the economy of Tropical Isle. The price level is 100. When aggregate planned expenditure equals 25 billion seashells, aggregate planned expenditure is _______ than real GDP and there is an unplanned _______ in inventories and real GDP will ___________.

    can25005.gif

    less; increase; decrease
    greater; decrease; increase
    greater; increase; decrease
    less; decrease; increase


  • 6
  • An increase in autonomous expenditure will _______ the aggregate expenditure curve and an increase in the marginal propensity to save will _______ the aggregate expenditure curve, all other things remaining the same.

    increase the slope of; shift
    increase the slope of; decrease the slope of
    shift; decrease the slope of
    shift; shift


  • 7
  • The _______ the marginal propensity to consume, the _______ is the slope of the aggregate expenditure curve and the _______ is the multiplier.

    smaller; greater; larger
    larger; greater; smaller
    larger; greater; larger
    larger; lower; larger


  • 8
  • The multiplier is 1.5. A decrease in investment of $5 billion will shift the aggregate demand curve __________ by _______________.

    leftward; $5 billion
    rightward; less than $5 billion
    leftward; $7.5 billion
    leftward; less than $5 billion


  • 9
  • The multiplier is 1.5. If investment decreases by $5 billion and the SAS curve slopes upward, then in the short run, equilibrium expenditure will decrease by __________________.


    $7.5 billion
    more than $7.5 billion
    less than $7.5 billion
    $5 billion


  • 10
  • An economy is at point a in the figure. Investment increases. The economy will move to point _______ in the short run and to point _______ in the long run.


    can25006.gif

    d; c
    b; c
    d; a
    b; a


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