Quiz
Chapter 12
Create a free account to finish this quiz
Save your progress and see your final score.
Already have an account? Sign in
Questions in this quiz (30)
1The aggregate expenditure model focuses on the relationship of between ______ and ____ in the short run assuming ______ is constant,
- AA) total production, total income, real GDP
- BB) total spending, real GDP, total income
- CC) total spending, real GDP, the price level
- DD) total income, real GDP, the price level
2As a result of slow economic growth following the recession of 2007-2009 many companies including Cisco systems, lockhead martin, cracker barrel old country cut production and employment as a result of sluggish growth in the total amount of spending in the economy. the total amount of spending in uncommonly is known as
- AA) deficit spending
- BB) planned investment spending
- CC) aggregate spending
- DD) equilibrium spending
3the key idea of the aggregate expenditure model is that any particiular year the level of GDP is determined mainly by
- AA) investment spending
- BB) export spending
- CC) government spending
- DD) the level of aggregate expenditure
4A decrease in cosumer confidence can put your job at risk if
- AA) aggregate expenditures fall
- BB) consumers expect their incomes to rise in the future
- CC) aggregate expenditures rise
- DD) consumers expect firms to increase investment in the future
5Economists first began studying the relationship between changes in the aggregate expenditure and changed in the GDO
- AA) in the 1950's
- BB) during the great deppression
- CC) at the end of the civil war
- DD) during the industrial revolution
6The aggregate expenditure model focusses on the ______ relationship between real spending and __________
- AA) short run, real gdp
- BB) short run, inflation
- CC) long run, real GDP
- DD) long run, inflation
7The formula for aggregate expenditure is
- AA) AE= C+I+G
- BB) AE= C+I+G-NX
- CC) AE= C+1+G+ NX
- DD) AE = C+1+depreciation -NX
8If inventories decline by more the analysts predict they will decline this implies that
- AA) actual investment spending was greater then planned investment spending
- BB) actual investment spending was less planned than investment spending
- CC) actual investment spending was equal to than planned investment spending
- DD) there is no relationship between actual investment spending and planned investment spending
9When aggregate expenditure =GDP
- AA) macroeconomics eqilibrium occurs
- BB) the federal budget is balanced
- CC) net exports equal zero
- DD) savings equal zero
10cosumption is $5 millón planned investment spending is $8 million, government purchases are $10 million and net exports are equal to 2 million. if GDP during the same time period equal to $27 million what unplanned changes in inventories occurred
- AA) There was an unplanned increase in inventories equal to $2 million
- BB) there was no unplanned change in inventories
- CC) There was an unplanned decrease in inventories equal to $2 million
- DD) There was an unplanned decrease in inventories equal to $19 million
11What is the largest component of aggregate expenditure
- AA) planned investment expenditures
- BB) consumption expenditures
- CC) government expenditures
- DD) net export expenditures
12Which of the following will cause direct increase in consumption spending?
- AA) An increase in planned investment
- BB) An increase in government spending
- CC) an increase in disposable income
- DD) a decrease in net export spending
13____ in taxes will decrease consumption spending, and ____ in transfer payments will increase consumption spending.
- AA) an increase and increase
- BB) a decrease, an increase
- CC) an increase, a decrease
- DD) a decrease, a decrease
14A decrease is social security payments will
- AA) decrease consumption spending
- BB) decrease investment spending
- CC) decrease government spending
- DD decrease export spending
15Decrease in the price level will
- AA) lower consumption because goods and services are less affordable
- BB) raise consumption because goods and services are more affordable
- CC) raise consumption because real wealth increases
- DD) lower consumption because real wealth decreases
16Which of the following will raise consumer expenditures
- AA) and increase in interest rates
- BB) a gerneral decline in housing prices
- CC) an increase in expected future income
- DD) an increase in price level
17The slope of the consumption function is equal to
- AA) the change in consumption divided by the change in disposable income
- BB) the change in consumption divided by the change in personal income
- CC)the change in disposbale income divided by the change in consumption
- DD) the change in national income divided by the change in consumption
18The marginal propensity to save is defined as
- AA) saving divided by disposable income
- BB) disposable income divided by saving
- CC) the change in saving divided by the change in disposible income
- DD) the change in disposable income divided by the change in saving
19Investment spending ____ during a recession and _____ during an expansion
- AA) declines, increases
- BB) increases, declines
- CC) increases, increases
- DD) declines, declines
20Consumer spending ___ and investment spending ____
- AA) is a very volatile and is subject to flux followed by a smooth trend
- BB) follows smooth trend is more volatile and subject to flux
- CC) follows smooth trend is urge most stable componet of aggregate expenditure
- DD) is very erratic, is also erratic but less erratics then consumer spending
21If planned aggregate expenditure is less than total production
- AA) actual inventories will equal planned inventories
- BB) firms will expirence an unplanned increase in inventories
- CC) GDP will increase
- DD)the economy is in equilibrium
22If planned aggregate expenditure is less then the total production
- AA) actual inventories will equal planned inventories
- BB) firms will expirence ab unplanned decrease in inventories
- CC) GDP will decrease
- DD) Households have increasingly pessimistic expectations about future income
23Which of the following leads to an increase in real GDP
- AA) a decrease in government spending
- BB) a decrease in the inflation rate in other countries, relative to the inflation in the U.S
- CC) a decrease in intrest rates
- DD)Households have increasingly pessimistic expectations about future income
24If planned aggregate expenditure is below potential GDP and planned aggregate expenditure equals GDP then
- AA) actual inventory investment will be less than planned inventory investment
- BB) ctual inventory investment will be greater than planned inventory investment
- CC) the economy is in recession
- DD) the economy is at full employment
25Assume that inventories declined more the analysis's predicted this implies that
- AA) planned aggregate was greater than real GDP
- BB) planned aggregate was equal to real GDP
- CC) planned aggregate was greater less than real GDP
- DD) planned aggregate was unrelated real GDP
26Planned aggregate expenditure is equal to
- AA) consumption spending only
- BB) consumption spending plus planned investment spending
- CC) planned investment spending only
- DD) consumption spending plus planned investment spending plus government purchases plus net exports
27If planned aggregate expenditure is greater than total production
- AA) actual inventories will equal planned inventories
- BB) firms will expirance unplanned increase in inventories
- CC) GDP will increase
- DD the economy is in equilibrium
28which of the following leads to a decrease real GDP
- AA) an increase in government spending
- BB) An increase in the inflation rate in other countries relative to the inflation in the U.S
- CC) an increase in interest rates
- DD) households have increasingly optimistic expections about future income
29If planned aggregate expentidture is above potential GDP and planned aggregate expenditure equals GDP then
- AA) actual inventory investment will be less then planned inventory investment
- BB) actual inventory investment will be greater then planned inventory investment
- CC) the economy is in an expansion
- DD) the economy is at full employment
30________ is equal to consumption spending plus planned investment spending plus government purchases plus net exports
- AA) full employment GDP
- BB) short run aggregate supply
- CC) planned inventory investment
- DD) planned aggregate expenditure
Information
- Description
- Quiz on Chapter 12, created by sobe711 on 06/12/2014.
- Author
- sobe711
- Language
- English
- Views
- 9
- Rating
- No ratings yet Rate this quiz