Question 1

The expenditure multiplier applies only to changes in government spending.

Accepted Answer

A) True 
 B)False

Question 2

A change in aggregate expenditures for reasons other than the price level will shift the aggregate demand curve.

Accepted Answer

A) True 
 B)False

Question 3

If government spending increased by $100 billion and the MPS within the economy was 0.25,what would be the total impact on real GDP?

Accepted Answer

A)   $25 billion increase
B)   $75 billion increase
C)   $133 billion increase
D)   $400 billion increaseE) C) and D)
F) A) and B)

Question 4

The marginal propensity to consume is a measure of the additional consumption that results from a one-dollar increase in disposable income.

Accepted Answer

A) True 
 B)False

Question 5

Bill's disposable income goes from $100,000 in 2010 to $200,000 in 2011,and his consumption spending goes from $80,000 in 2010 to $140,000 in 2011.Which of the following statements about Bill is true?

Accepted Answer

A)   Bill's MPC rose between 2010 and 2011.
B)   Bill's MPC is equal to 0.7.
C)   Bill's MPC is equal to 0.6.
D)   Both (a)  and (b)  are true.E) B) and D)
F) B) and C)

Question 6

A given change in disposable income would have the smallest effect on consumption with which of the following marginal propensities to consume?

Accepted Answer

A)   0.2
B)   0.4
C)   0.6
D)   0.8E) A) and B)
F) None of the above

Question 7

When all the factors of aggregate expenditure are influenced by income,the multiplier becomes a function of the:

Accepted Answer

A)   marginal propensity of government purchases.
B)   marginal propensity to consume out of disposable income.
C)   marginal propensity of aggregate expenditure.
D)   marginal propensity to import.E) All of the above
F) B) and D)

Question 8

Assume that autonomous expenditures in an economy decreased by $10 billion.What is the change in aggregate demand at a given price level if the MPC is 0.5?

Accepted Answer

A)   increase by $50 billion
B)   increase by $10 billion
C)   decrease by $20 billion
D)   decrease by $10 billionE) B) and C)
F) B) and D)

Question 9

When a person's consumption goes from $8,000 to $12,000 when her disposable income goes from $10,000 to $20,000,her MPC equals:

Accepted Answer

A)   0.4.
B)   0.6.
C)   0.75.
D)   0.8.E) A) and C)
F) A) and B)

Exam 23: The Aggregate Expenditure Model

If government spending increased by $100 billion and the MPS within the economy was 0.25,what would be the total impact on real GDP?

Correct Answer
verified

A change in aggregate expenditures for reasons other than the price level will shift the aggregate demand curve.

Correct Answer
verified

When a person's consumption goes from $8,000 to $12,000 when her disposable income goes from $10,000 to $20,000,her MPC equals:

Correct Answer
verified

A given change in disposable income would have the smallest effect on consumption with which of the following marginal propensities to consume?

Correct Answer
verified

Assume that autonomous expenditures in an economy decreased by $10 billion.What is the change in aggregate demand at a given price level if the MPC is 0.5?

Correct Answer
verified

The expenditure multiplier applies only to changes in government spending.

Correct Answer
verified

The marginal propensity to consume is a measure of the additional consumption that results from a one-dollar increase in disposable income.

Correct Answer
verified

Bill's disposable income goes from $100,000 in 2010 to $200,000 in 2011,and his consumption spending goes from $80,000 in 2010 to $140,000 in 2011.Which of the following statements about Bill is true?

Correct Answer
verified

When all the factors of aggregate expenditure are influenced by income,the multiplier becomes a function of the:

Correct Answer
verified

Exam 23: The Aggregate Expenditure Model

If government spending increased by $100 billion and the MPS within the economy was 0.25,what would be the total impact on real GDP?

Correct AnswerverifiedShow Answer

A change in aggregate expenditures for reasons other than the price level will shift the aggregate demand curve.

Correct AnswerverifiedShow Answer

When a person's consumption goes from $8,000 to $12,000 when her disposable income goes from $10,000 to $20,000,her MPC equals:

Correct AnswerverifiedShow Answer

A given change in disposable income would have the smallest effect on consumption with which of the following marginal propensities to consume?

Correct AnswerverifiedShow Answer

Assume that autonomous expenditures in an economy decreased by $10 billion.What is the change in aggregate demand at a given price level if the MPC is 0.5?

Correct AnswerverifiedShow Answer

The expenditure multiplier applies only to changes in government spending.

Correct AnswerverifiedShow Answer

The marginal propensity to consume is a measure of the additional consumption that results from a one-dollar increase in disposable income.

Correct AnswerverifiedShow Answer

Bill's disposable income goes from $100,000 in 2010 to $200,000 in 2011,and his consumption spending goes from $80,000 in 2010 to $140,000 in 2011.Which of the following statements about Bill is true?

Correct AnswerverifiedShow Answer

When all the factors of aggregate expenditure are influenced by income,the multiplier becomes a function of the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified