Question 1

Which of the following is consistent with the classical view of Say's law?

Accepted Answer

A)   Saving increases by $2 billion and investment decreases by $2 billion.
B)   Saving increases by $2 billion and consumption rises by $2 billion.
C)   Saving increases by $2 billion, consumption decreases by $2 billion, and investment rises by something less than $2 billion.
D)   Saving decreases by $2 billion and consumption decreases by more than $2 billion.
E)   none of the above

Question 2

How is the multiplier expressed in terms of the MPS?

Accepted Answer

A)   1 - MPS
B)   1/MPS
C)   1/(1 - MPS) 
D)   1/(1 + MPS)

Question 3

Exhibit 10-4
 1 denote the present level of disposable income.An increase in disposable income is likely to,ceteris paribus,cause a movement to point A)  A. B)  B. C)  F. D)  D. E)  E." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 10-4.Let Yd1 denote the present level of disposable income.An increase in disposable income is likely to,ceteris paribus,cause a movement to point

Accepted Answer

A)   A.
B)   B.
C)   F.
D)   D.
E)   E.

Question 4

Exhibit 10-1
 1,there is a tendency for Real GDP to A)  rise. B)  fall. C)  remain unchanged. D)  There is not enough information to answer this question." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 10-1.At Q1,there is a tendency for Real GDP to

Accepted Answer

A)   rise.
B)   fall.
C)   remain unchanged.
D)   There is not enough information to answer this question.

Question 5

Exhibit 10-2
 
-Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift ____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.

Accepted Answer

A)   downward; greater
B)   downward; less
C)   upward; less
D)   upward; greater

Question 6

An increase in autonomous consumption,an increase in disposable income,or a decrease in the marginal propensity to consume can all increase consumption.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is false?

Accepted Answer

A)   MPC plus MPS equals 1.
B)   MPC is additional saving divided by additional disposable income.
C)   The MPS is the ratio of the change in saving to the change in disposable income.
D)   If MPC equals 0.80, autonomous consumption equals $400, and disposable income equals $600, then consumption equals $880.
E)   none of the above

Question 8

Total production

Accepted Answer

A)   always equals total expenditures.
B)   equals total expenditures in equilibrium.
C)   is always greater than total expenditures.
D)   is always less than total expenditures.

Question 9

If autonomous consumption rises by $20 and,as a result,Real GDP rises by $200,then the multiplier is

Accepted Answer

A)   4.
B)   5.
C)   6.
D)   10.
E)   none of the above

Question 10

If total production (TP) is greater than total expenditures (TE) ,it follows that

Accepted Answer

A)   producers have produced more than individuals buy.
B)   optimum inventory levels rise.
C)   firms have underproduced.
D)   actual inventory levels unexpectedly rise.
E)   a and d

Question 11

Inventory levels unexpectedly fall and firms increase the quantity of goods and services they produce.Which of the following is consistent with these two occurrences?

Accepted Answer

A)   TP is greater than TE.
B)   TP is less than TE.
C)   TE is equal to TP minus the rise in inventories above the optimum inventory level.
D)   TP is equal to TE.
E)   b and c

Question 12

Exhibit 10-5
 
-Refer to Exhibit 10-5. When TE is $700 billion,what will firms most likely do next?

Accepted Answer

A)   Firms will increase production to increase inventories to their optimum levels.
B)   Firms will neither increase nor decrease production since the economy is in equilibrium.
C)   Firms will cut back production to reduce inventories to their optimum levels.
D)   It is impossible to determine what firms are likely to do based on this information.

Question 13

Two economists,Smith and Jones,are discussing the currently high unemployment rate.Smith says that something ought to be done quickly because the economy may not be able to restore itself to full employment.Jones says that it is better to take a "hands-off" approach.Which of the following is most likely to be true?

Accepted Answer

A)   Smith and Jones are most likely both Keynesian economists with a few minor differences of opinion.
B)   Smith and Jones are most likely both classical economists with a few minor differences of opinion.
C)   Jones is likely to be a Keynesian economist and Smith is likely to be a classical economist.
D)   Smith is likely to be a Keynesian economist and Jones is likely to be a classical economist.
E)   none of the above.

Question 14

Keynes believed that

Accepted Answer

A)   the internal structure of the economy is extremely competitive and that wage-price flexibility exists.
B)   monopolistic elements in the economy prevent immediate and sharp price declines in response to falling demand.
C)   even though there are monopolistic elements in the economy, wage-price flexibility exists.
D)   in spite of the competitiveness of the economy, wage-price flexibility does not exist.

Question 15

Here is a consumption function: C = C0 + MPC(Yd) .If MPC is 0.80,then we know that

Accepted Answer

A)   as Yd rises by $1, Co rises by $0.80.
B)   as Yd rises by $1, C rises by $0.80.
C)   Yd rises by $0.80.
D)   as C0 rises by $0.80, Yd rises by $1.

Question 16

When total production is greater than total expenditures,

Accepted Answer

A)   the economy is in disequilibrium.
B)   there are increases in inventory.
C)   total output will decrease.
D)   all of the above

Question 17

Exhibit 10-2
  TE. C)  TE > TP. D)  the relationship between TP and TE cannot be determined." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 10-2.At M,

Accepted Answer

A)   TP = TE.
B)   TP > TE.
C)   TE > TP.
D)   the relationship between TP and TE cannot be determined.

Question 18

If the multiplier is 5,then the MPC must be

Accepted Answer

A)   1/5.
B)   1/6.
C)   3/4.
D)   4/5.
E)   2/3.

Question 19

The marginal propensity to consume plus the marginal propensity to save is

Accepted Answer

A)   equal to zero.
B)   greater than zero but less than one.
C)   equal to one.
D)   greater than one.

Question 20

Using the concept of the multiplier,explain in detail how college students flocking to beach towns for spring break can positively impact the beach towns' economies.

Accepted Answer

College students on spring break will sp...

Exam 10: Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Exhibit 10-2 -Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift __ and the new level of equilibrium Real GDP will be _ than $4,500.

Correct Answer
verified

If autonomous consumption rises by $20 and,as a result,Real GDP rises by $200,then the multiplier is

Correct Answer
verified

When total production is greater than total expenditures,

Correct Answer
verified

Here is a consumption function: C = C₀ + MPC(Y_d) .If MPC is 0.80,then we know that

Correct Answer
verified

An increase in autonomous consumption,an increase in disposable income,or a decrease in the marginal propensity to consume can all increase consumption.

Correct Answer
verified

The marginal propensity to consume plus the marginal propensity to save is

Correct Answer
verified

Correct Answer
verified

Total production

Correct Answer
verified

Inventory levels unexpectedly fall and firms increase the quantity of goods and services they produce.Which of the following is consistent with these two occurrences?

Correct Answer
verified

Which of the following statements is false?

Correct Answer
verified

Exhibit 10-1 -Refer to Exhibit 10-1.At Q₁,there is a tendency for Real GDP to

Correct Answer
verified

If the multiplier is 5,then the MPC must be

Correct Answer
verified

How is the multiplier expressed in terms of the MPS?

Correct Answer
verified

Exhibit 10-5 -Refer to Exhibit 10-5. When TE is $700 billion,what will firms most likely do next?

Correct Answer
verified

Which of the following is consistent with the classical view of Say's law?

Correct Answer
verified

Exhibit 10-4 -Refer to Exhibit 10-4.Let Yd₁ denote the present level of disposable income.An increase in disposable income is likely to,ceteris paribus,cause a movement to point

Correct Answer
verified

Keynes believed that

Correct Answer
verified

Using the concept of the multiplier,explain in detail how college students flocking to beach towns for spring break can positively impact the beach towns' economies.

Correct Answer
verified
College students on spring break will sp...
View Answer

Exhibit 10-2 -Refer to Exhibit 10-2.At M,

Correct Answer
verified

If total production (TP) is greater than total expenditures (TE) ,it follows that

Correct Answer
verified

Exam 10: Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Exhibit 10-2 -Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift ____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.

Correct AnswerverifiedShow Answer

If autonomous consumption rises by $20 and,as a result,Real GDP rises by $200,then the multiplier is

Correct AnswerverifiedShow Answer

When total production is greater than total expenditures,

Correct AnswerverifiedShow Answer

Here is a consumption function: C = C0 + MPC(Yd) .If MPC is 0.80,then we know that

Correct AnswerverifiedShow Answer

An increase in autonomous consumption,an increase in disposable income,or a decrease in the marginal propensity to consume can all increase consumption.

Correct AnswerverifiedShow Answer

The marginal propensity to consume plus the marginal propensity to save is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Total production

Correct AnswerverifiedShow Answer

Inventory levels unexpectedly fall and firms increase the quantity of goods and services they produce.Which of the following is consistent with these two occurrences?

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

Exhibit 10-1 -Refer to Exhibit 10-1.At Q1,there is a tendency for Real GDP to

Correct AnswerverifiedShow Answer

If the multiplier is 5,then the MPC must be

Correct AnswerverifiedShow Answer

How is the multiplier expressed in terms of the MPS?

Correct AnswerverifiedShow Answer

Exhibit 10-5 -Refer to Exhibit 10-5. When TE is $700 billion,what will firms most likely do next?

Correct AnswerverifiedShow Answer

Which of the following is consistent with the classical view of Say's law?

Correct AnswerverifiedShow Answer

Exhibit 10-4 -Refer to Exhibit 10-4.Let Yd1 denote the present level of disposable income.An increase in disposable income is likely to,ceteris paribus,cause a movement to point

Correct AnswerverifiedShow Answer

Keynes believed that

Correct AnswerverifiedShow Answer

Using the concept of the multiplier,explain in detail how college students flocking to beach towns for spring break can positively impact the beach towns' economies.

Correct AnswerverifiedCollege students on spring break will sp...View AnswerShow Answer

Exhibit 10-2 -Refer to Exhibit 10-2.At M,

Correct AnswerverifiedShow Answer

If total production (TP) is greater than total expenditures (TE) ,it follows that

Correct AnswerverifiedShow Answer

Exhibit 10-2 -Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift __ and the new level of equilibrium Real GDP will be _ than $4,500.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Here is a consumption function: C = C₀ + MPC(Y_d) .If MPC is 0.80,then we know that

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Exhibit 10-1 -Refer to Exhibit 10-1.At Q₁,there is a tendency for Real GDP to

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Exhibit 10-4 -Refer to Exhibit 10-4.Let Yd₁ denote the present level of disposable income.An increase in disposable income is likely to,ceteris paribus,cause a movement to point

Correct Answer
verified

Correct Answer
verified

Correct Answer
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College students on spring break will sp...
View Answer

Correct Answer
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Correct Answer
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