Assignment 9 Macro

1.

1 point

Refer to the diagram for a private closed economy. The equilibrium level of GDP is:

$200.

$100.

$400.

$300.

2.

1 point

Other things equal, the multiplier effect associated with a change in government spending is:

equal to that associated with a change in investment or consumption.

greater than that associated with a change in investment.

the same as that associated with a change in taxes.

less than that associated with a change in investment.

3.

1 point

John Maynard Keynes created the aggregate expenditures model based primarily on what historical event?

Bank panic of 1907.

Great Depression.

Spectacular economic growth during World War II.

Economic expansion of the 1920s.

4.

1 point

In the United States from 1929 to 1933, real GDP _____________ and the unemployment rate ________________.

declined by 27 percent; rose to 25 percent

declined by 21 percent; rose to 27 percent

increased by 21 percent; fell to 2 percent

declined by 40 percent; rose to 50 percent

5.

1 point

Refer to the diagrams. Curve A:

is an investment demand curve and curve B is an investment schedule.

shifts to the left when curve B shifts upward.

is an investment schedule and curve B is a consumption of fixed capital schedule.

and curve B are totally unrelated.

6.

1 point

In the aggregate expenditures model, it is assumed that investment:

automatically changes in response to changes in real GDP.

does not respond to changes in interest rates.

changes by less in percentage terms than changes in real GDP.

does not change when real GDP changes.

7.

1 point

Answer the question on the basis of the following data for a private closed economy. Refer to the data. The MPS is:

3/5.

2/5.

7/10.

3/10.

8.

1 point

A private closed economy includes:

households, businesses, and government, but not international trade.

households, businesses, and international trade, but not government.

households and businesses, but not government or international trade.

households only.

9.

1 point

In which of the following situations for a mixed open economy will the level of GDP expand?

When GDP exceeds C + Ig + G + Xn.

When S + T + M exceeds Ig + G + X.

When Ig + M + T exceeds C + X + S.

When Ig + X + G exceeds S + M + T.

10.

1 point

If at some level of GDP the economy is experiencing an unintended decrease in inventories:

the price level will fall.

the business sector will lay off workers.

domestic output will increase.

the aggregate level of saving will decline.