Homework Answers
Option B
Explanation: Since consumption increases with an increase in GDP, the Aggregate Expenditure line slopes upward.
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17) The aggregate expenditure line is upward sloping since as GDP increases, A) government purchases increase...
For each of the following shocks, identify what component(s) of U.S. planned aggregate expenditure are directly...
For each of the following shocks, identify what component(s) of U.S. planned aggregate expenditure are directly affected and in which direction. a. Income tax rates increase: Which component of planned aggregate expenditure is affected? Consumption Investment Government spending Net exports None of these are affected What happens to planned aggregate expenditure? Increases Decreases Unaffected b. China experiences an economic boom: Which component of planned aggregate expenditure is affected? Consumption Investment Government spending Net exports None of these are affected What...
For each of the following transactions, state the effect both on U.S. GDP and on the...
For each of the following transactions, state the effect both on U.S. GDP and on the four components of aggregate expenditure a. Your mother buys a new car from a U.S. producer. us, GDP (Click to select) Of the four components of aggregate expenditure: net exports do not change and government purchases rise. investment rises and net exports do not change. investment rises and net exports fall. consumption rises and net exports do not change. consumption rises and net exports...
r components of aggregate expenditure and GDP for the following economy using data from the table...
r components of aggregate expenditure and GDP for the following economy using data from the table below. Instructions: Enter your responses as whole numbers. GDP Data Consumption expenditures $600 Exports $75 Government purchases of goods and services $200 Construction of new homes and apartments $100 Sales of existing homes and apartments $200 Imports $50 Beginning-of-year inventory stocks $100 End-of-year inventory stocks $125 Business fixed investment $100 Government payments to retirees $100 Household purchases of durable goods $150 Consumption expenditures: $...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
18. If the federal government increases the dollar amount of Social Security benefit checks for the...
18. If the federal government increases the dollar amount of Social Security benefit checks for the elderly, then a. the consumption schedule will shift upward in the 45-degree line diagram. b. the aggregate demand curve will shift to the right in the aggregate demand aggregate supply curves diagram. c. the effect on the equilibrium real GDP will be the same as a cut in taxes. d. All of the above are correct. 19. The paradox of thrift is the notion...
For each of the following transactions, state the effect both on U.S. GDP and on the...
For each of the following transactions, state the effect both on U.S. GDP and on the four components of aggregate expenditure. a. Your mother-in-law buys a new car from a U.S. producer. U.S. GDP (Click to select) Of the four components of aggregate expenditure: consumption rises and net exports fall. investment rises and net exports fall. investment rises and net exports do not change. O consumption rises and net exports do not change. b. Your mother-in-law buys a new car...
The introduction of a tax by the government will: a. affect government spending since the...
The introduction of a tax by the government will: a. affect government spending since the government levies the tax. b. affect consumption through its effect on investment. c. have no effect on real GDP since real GDP comprises consumption expenditure, investment expenditure, and government expenditure. d. increase real GDP since it enables the government to increase spending. e. affect consumption through a change in disposable income.
Real GDP Planned Government Net Aggregate Consumption Investment Purchases Exports Expenditures $2,000 $1,600 $250 $250 $100...
Real GDP Planned Government Net Aggregate Consumption Investment Purchases Exports Expenditures $2,000 $1,600 $250 $250 $100 2,500 2,000 250 250 100 3,000 2,400 250 250 100 3,500 2,800 250 250 100 If potential GDP is $4,000 billion, how much should government spending increase so that the economy can move to the full employment level of GDP? (Hint: multiplier effect) $100 O $300 $200 $400 O C DOLL
18. If the federal government increases the dollar amount of Social Security benefi...
18. If the federal government increases the dollar amount of Social Security benefit checks for the elderly, then a. the consumption schedule will shift upward in the 45-degree line diagram. b. the aggregate demand curve will shift to the right in the aggregate demand aggregate supply curves diagram. c. the effect on the equilibrium real GDP will be the same as a cut in taxes. d. All of the above are correct. 19. The paradox of thrift...
Derive the aggregate expenditure function, and calculate the equilibrium real GDP.. Determine the expenditure multiplier using aggregate expenditure function slop value... What is the expenditure multiplier? ... Everything else the same, by how much do
Question#1A The following are details of the expenditure of a very small economy. All the autonomous expenditures are given in $ thousand. C = 200 + 0.8Yd I = 10 G = 50 T = 0.05Y X = 40 M = 0.1Y Derive the aggregate expenditure function, and calculate the equilibrium real GDP Determine the expenditure multiplier using aggregate expenditure function slope value Question#1B Suppose the slope of the AE curve is 0.80. i) What is the expenditure multiplier? ii) Everything else the same, by how much does equilibrium aggregate expenditure...
For each of the following transactions, state the effect both on U.S. GDP and on the four components of aggregate expenditure a. Your mother buys a new car from a U.S. producer. us, GDP (Click to select) Of the four components of aggregate expenditure: net exports do not change and government purchases rise. investment rises and net exports do not change. investment rises and net exports fall. consumption rises and net exports do not change. consumption rises and net exports...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
18. If the federal government increases the dollar amount of Social Security benefit checks for the elderly, then a. the consumption schedule will shift upward in the 45-degree line diagram. b. the aggregate demand curve will shift to the right in the aggregate demand aggregate supply curves diagram. c. the effect on the equilibrium real GDP will be the same as a cut in taxes. d. All of the above are correct. 19. The paradox of thrift is the notion...
For each of the following transactions, state the effect both on U.S. GDP and on the four components of aggregate expenditure. a. Your mother-in-law buys a new car from a U.S. producer. U.S. GDP (Click to select) Of the four components of aggregate expenditure: consumption rises and net exports fall. investment rises and net exports fall. investment rises and net exports do not change. O consumption rises and net exports do not change. b. Your mother-in-law buys a new car...
Real GDP Planned Government Net Aggregate Consumption Investment Purchases Exports Expenditures $2,000 $1,600 $250 $250 $100 2,500 2,000 250 250 100 3,000 2,400 250 250 100 3,500 2,800 250 250 100 If potential GDP is $4,000 billion, how much should government spending increase so that the economy can move to the full employment level of GDP? (Hint: multiplier effect) $100 O $300 $200 $400 O C DOLL
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