Homework Answers
1. Full employment (as per classical economists, in the long run all economies reach full employment level of output)
2. Disposable income (asper keynes, disposable income affects consumption expenditure)
3. Focus on increasing aggregate demand in order to stimulate the economy (Keynesian economists believe AD must be altered in order to bring the economy to equilibrium)
4. Consumption function
5. Relation between consumption and disposable personal income
6. An increase in consumer wealth (this would increase consumer consumption expenditure)
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Date Class: Name: Principles of Macro Multiple Choice en the choice shares completes the statement o...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice Ident the choice thar best completes the statement or answer the question 1. Classical economie theory predicted that in the long run the economy would experience: a. below full unemployment. b. rising rate of inflation. c. full employment. d idle factors of production. 2. According to Keynes, what is the most important determinant of households spending on goods and services? a. The price level....
meh talucquClass: Date: Sweet Sixteen Multiple Choice Identify the choice that best completes the statement or...
meh talucquClass: Date: Sweet Sixteen Multiple Choice Identify the choice that best completes the statement or answer the question. 1. Classical economists believed that: a. price flexibility automatically directs market economies to full employment. b. budget deficits and surpluses were necessary for the control of economic fluctuations. c. market economies suffer prolonged periods of recessions and depressions d. market economies are inberently unstable because of fluctuating aggregate demand. 2. The popular theory prior to the Great Depression that the economy...
Product 13) 13) The gap that exists when equilibrium real Gross Domestic (GDP) is greater than...
Product 13) 13) The gap that exists when equilibrium real Gross Domestic (GDP) is greater than full employment real Gross Domestic Product (GDP) is called a(n) A) demand gap. C) recessionary gap B) employment gap D) inflationary gap 14) 14) Economic growth will NOT result in inflation if aggregate demand shifts A) outward to the right at the same speed as aggregate supply B) outward to the right as aggregate supply shifts inward to the left. C) inward to the...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
help MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question....
help
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Refer to the information provided in Figure 23.5 below to answer the question(s) that follow, Aggregate saving (in billions) 400 800 900 Aggregate income (in billions) Figure 23.5 1) 1) Refer to Figure 23.5. If aggregate consumption is the only expenditure in this society, at an income level of $800 billion A) consumption equals income. B) saving is zero. C) the economy is in...
ents is true concerning the consumption function et e n between ale Ince ction lies above...
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
When Monica spends more than her disposable income, Monica is O A. unemployed. O B. dissaving....
When Monica spends more than her disposable income, Monica is O A. unemployed. O B. dissaving. O C. investing. D. saving. Question Help According to the figure at right, planned consumption and income are equal at an income level of 45 Y1 Y2YoYs Real Disposable Income (S per year) -Ques According to the figure at right, the average propensity to save (APS) is zero at point O A. F O B. D OC. J OD. I 45 Y1 Y2 Y....
Use the following macroeconomic model structure to answer the questions followed. 8 pts C = 300...
Use the following macroeconomic model structure to answer the questions followed. 8 pts C = 300 + 0.8Yd; C = consumption function; Yd (Y-T) = disposable income I = 200; I = Investment G = 400; G = Government expenditure T = 200; T = Tax revenue Also assume that Yf = Full employment GDP (Potential GDP) = 5,000 8.1. The equilibrium GDP level (income) is _________. Hint: Ye = C+I+G a. 2,850 b. 3,700 c. 3,145 d. 3,800 8.2....
ccording to our discussion in class, sinice govemment spending may be the result of olitical decisions...
ccording to our discussion in class, sinice govemment spending may be the result of olitical decisions it is often referred to as being a wasteful b. in abundance c excessive Consider the consumption function COY10+2Y What is the level of autonomous consumption? Suppose disposable income is 1 a. 2 b. 0 c. 40 d. 10 Suppose inventories accumulate so firms realize escessive inventories concluded that aggregate expenditure must have It can be b. increased c. stayed the same d. cannot...
16) Consider a macro model with a constant price level and demand-determined output. A rise in...
16) Consider a macro model with a constant price level and demand-determined output. A rise in the net tax rate ________ the simple multiplier and ________ equilibrium national income. A) lowers; raises B) lowers; lowers C) raises; raises D) lowers; has no effect on E) raises; has no effect on 17) Other things being equal, an exogenous fall in the domestic price level leads to a rise in private-sector wealth. As a result, there is A) a downward shift in...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice Ident the choice thar best completes the statement or answer the question 1. Classical economie theory predicted that in the long run the economy would experience: a. below full unemployment. b. rising rate of inflation. c. full employment. d idle factors of production. 2. According to Keynes, what is the most important determinant of households spending on goods and services? a. The price level....
meh talucquClass: Date: Sweet Sixteen Multiple Choice Identify the choice that best completes the statement or answer the question. 1. Classical economists believed that: a. price flexibility automatically directs market economies to full employment. b. budget deficits and surpluses were necessary for the control of economic fluctuations. c. market economies suffer prolonged periods of recessions and depressions d. market economies are inberently unstable because of fluctuating aggregate demand. 2. The popular theory prior to the Great Depression that the economy...
Product 13) 13) The gap that exists when equilibrium real Gross Domestic (GDP) is greater than full employment real Gross Domestic Product (GDP) is called a(n) A) demand gap. C) recessionary gap B) employment gap D) inflationary gap 14) 14) Economic growth will NOT result in inflation if aggregate demand shifts A) outward to the right at the same speed as aggregate supply B) outward to the right as aggregate supply shifts inward to the left. C) inward to the...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
help
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Refer to the information provided in Figure 23.5 below to answer the question(s) that follow, Aggregate saving (in billions) 400 800 900 Aggregate income (in billions) Figure 23.5 1) 1) Refer to Figure 23.5. If aggregate consumption is the only expenditure in this society, at an income level of $800 billion A) consumption equals income. B) saving is zero. C) the economy is in...
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
When Monica spends more than her disposable income, Monica is O A. unemployed. O B. dissaving. O C. investing. D. saving. Question Help According to the figure at right, planned consumption and income are equal at an income level of 45 Y1 Y2YoYs Real Disposable Income (S per year) -Ques According to the figure at right, the average propensity to save (APS) is zero at point O A. F O B. D OC. J OD. I 45 Y1 Y2 Y....
ccording to our discussion in class, sinice govemment spending may be the result of olitical decisions it is often referred to as being a wasteful b. in abundance c excessive Consider the consumption function COY10+2Y What is the level of autonomous consumption? Suppose disposable income is 1 a. 2 b. 0 c. 40 d. 10 Suppose inventories accumulate so firms realize escessive inventories concluded that aggregate expenditure must have It can be b. increased c. stayed the same d. cannot...
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