Question 1

Refer to the information provided in Table 23.7 below to answer the question(s)  that follow.
Table 23.7 
-Refer to Table 23.7. At an aggregate output level of $400 billion, planned expenditure equals

Accepted Answer

A)   $450 billion.
B)   $500 billion.
C)   $550 billion.
D)   $850 billion.E) A) and C)
F) A) and B)

Question 2

Refer to the information provided in Figure 23.2 below to answer the question(s)  that follow. 1. C)  Y2. D)  Y2 - Y1." class="answers-bank-image d-inline" rel="preload" > Figure 23.2
-Refer to Figure 23.2. Jerry's saving equals zero at income level

Accepted Answer

A)   zero.
B)   Y1.
C)   Y2.
D)   Y2 - Y1.E) None of the above
F) C) and D)

Question 3

If the consumption function is above the 45-degree line

Accepted Answer

A)   consumption is less than income and saving is positive.
B)   consumption is less than income and saving is negative.
C)   consumption exceeds income and saving is positive.
D)   consumption exceeds income and saving is negative.E) All of the above
F) None of the above

Question 4

If actual investment exceeds planned investment

Accepted Answer

A)   there will be an accumulation of inventories.
B)   there will be no change in inventories.
C)   there will be a decline in inventories.
D)   none of the above.E) B) and D)
F) A) and B)

Question 5

Refer to the information provided in Table 23.7 below to answer the question(s)  that follow.
Table 23.7 
-Refer to Table 23.7. At an aggregate output level of $200 billion, the unplanned inventory change is

Accepted Answer

A)   -$200 billion.
B)   -$150 billion.
C)   -$50 billion.
D)   $100 billion.E) A) and B)
F) A) and D)

Question 6

If you earn an additional $200 in disposable income one week for feeding your neighbor's ferret

Accepted Answer

A)   the total of your consumption and saving will increase by more than $200.
B)   the total of your consumption and saving will increase by $200.
C)   the total of your consumption and saving will increase by less than $200.
D)   your consumption will increase by more than $200, even if your MPS is 0.1.E) B) and C)
F) C) and D)

Question 7

When planned spending exceeds output, there is an unplanned inventory investment.

Accepted Answer

A) True 
 B)False

Question 8

Refer to the information provided in Table 23.1 below to answer the question(s)  that follow.
Table 23.1 
-Refer to Table 23.1. At an aggregate income level of $100, aggregate saving would be

Accepted Answer

A)   -$70.
B)   -$30.
C)   $50.
D)   $70.E) A) and D)
F) None of the above

Question 9

Refer to the information provided in Table 23.7 below to answer the question(s)  that follow.
Table 23.7 
-Refer to Table 23.7. At an aggregate output level of $800 billion, aggregate saving

Accepted Answer

A)   equals -$50 billion.
B)   equals $0.
C)   equals $50 billion.
D)   cannot be determined from this information.E) None of the above
F) B) and C)

Question 10

Related to the Economics in Practice on p. 476: According to the "paradox of thrift," increased efforts to save will cause a(n)

Accepted Answer

A)   increase in income and an increase in overall saving.
B)   increase in income but no overall change in saving.
C)   decrease in income and an overall decrease in saving.
D)   decrease in income but an increase in saving.E) A) and B)
F) C) and D)

Question 11

Refer to the information provided in Figure 23.3 below to answer the question(s)  that follow.  Figure 23.3
-Refer to Figure 23.3. [-60 + 0.3Y] is this society's

Accepted Answer

A)   MPC.
B)   MPS.
C)   saving function.
D)   consumption function.E) None of the above
F) A) and D)

Question 12

Assume there is no government or foreign sector. If the multiplier is 5, a $4 billion increase in investment will cause aggregate output to increase by

Accepted Answer

A)   $125 billion.
B)   $80 billion.
C)   $50 billion.
D)   $20 billion.E) A) and B)
F) A) and D)

Question 13

Without the government or the foreign sector in the income-expenditure model, consumption equals

Accepted Answer

A)   planned aggregate expenditures plus actual investment.
B)   planned aggregate expenditures minus inventory adjustment.
C)   planned aggregate expenditures plus planned investment.
D)   planned aggregate expenditures minus planned investment.E) A) and B)
F) None of the above

Question 14

Y = C + S even when the economy is not in equilibrium.

Accepted Answer

A) True 
 B)False

Question 15

If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $________ and his saving rises by $________.

Accepted Answer

A)   500; 100
B)   2,500; 200
C)   2,000; 500
D)   2,500; 20E) All of the above
F) A) and D)

Question 16

Refer to the information provided in Figure 23.1 below to answer the question(s)  that follow.  Figure 23.1
-Refer to Figure 23.1. A(n)  ________ in the amount of ________ this household makes when this household's income is zero shifts the saving function downward.

Accepted Answer

A)   decrease; consumption
B)   decrease; spending
C)   increase; saving
D)   increase; consumptionE) B) and D)
F) A) and D)

Question 17

Refer to the information provided in Figure 23.11 below to answer the question(s)  that follow.  Figure 23.11
-Refer to Figure 23.11. If MPC increases to 0.8, equilibrium aggregate output

Accepted Answer

A)   increases to $250 million.
B)   remains at $200 million.
C)   increases to $400 million.
D)   cannot be determined from the given information.E) None of the above
F) C) and D)

Question 18

Firms hold planned inventories in anticipation of sales.

Accepted Answer

A) True 
 B)False

Question 19

Refer to the information provided in Table 23.1 below to answer the question(s)  that follow.
Table 23.1 
-Refer to Table 23.1. Society's MPC is

Accepted Answer

A)   0.95.
B)   0.90.
C)   0.80.
D)   0.05.E) A) and D)
F) A) and C)

Question 20

In macroeconomics, the point at which planned aggregate expenditures equals aggregate output

Accepted Answer

A)   is the equilibrium point.
B)   is where saving is negative.
C)   is only achieved if net exports are zero.
D)   only occurs when the MPC is equal to the MPS.E) All of the above
F) A) and B)

Exam 23: Aggregate Expenditure and Equilibrium Output

Refer to the information provided in Table 23.7 below to answer the question(s) that follow. Table 23.7 -Refer to Table 23.7. At an aggregate output level of $800 billion, aggregate saving

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Without the government or the foreign sector in the income-expenditure model, consumption equals

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Refer to the information provided in Table 23.1 below to answer the question(s) that follow. Table 23.1 -Refer to Table 23.1. At an aggregate income level of $100, aggregate saving would be

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Refer to the information provided in Table 23.7 below to answer the question(s) that follow. Table 23.7 -Refer to Table 23.7. At an aggregate output level of $400 billion, planned expenditure equals

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Refer to the information provided in Figure 23.3 below to answer the question(s) that follow. Figure 23.3 -Refer to Figure 23.3. [-60 + 0.3Y] is this society's

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Assume there is no government or foreign sector. If the multiplier is 5, a $4 billion increase in investment will cause aggregate output to increase by

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If the consumption function is above the 45-degree line

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Refer to the information provided in Figure 23.2 below to answer the question(s) that follow. Figure 23.2 -Refer to Figure 23.2. Jerry's saving equals zero at income level

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Y = C + S even when the economy is not in equilibrium.

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Refer to the information provided in Figure 23.1 below to answer the question(s) that follow. Figure 23.1 -Refer to Figure 23.1. A(n) ________ in the amount of ________ this household makes when this household's income is zero shifts the saving function downward.

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If you earn an additional $200 in disposable income one week for feeding your neighbor's ferret

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Refer to the information provided in Table 23.1 below to answer the question(s) that follow. Table 23.1 -Refer to Table 23.1. Society's MPC is

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Refer to the information provided in Figure 23.11 below to answer the question(s) that follow. Figure 23.11 -Refer to Figure 23.11. If MPC increases to 0.8, equilibrium aggregate output

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When planned spending exceeds output, there is an unplanned inventory investment.

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Related to the Economics in Practice on p. 476: According to the "paradox of thrift," increased efforts to save will cause a(n)

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In macroeconomics, the point at which planned aggregate expenditures equals aggregate output

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Firms hold planned inventories in anticipation of sales.

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If actual investment exceeds planned investment

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If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $________ and his saving rises by $________.

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Refer to the information provided in Table 23.7 below to answer the question(s) that follow. Table 23.7 -Refer to Table 23.7. At an aggregate output level of $200 billion, the unplanned inventory change is

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Refer to the information provided in Figure 23.1 below to answer the question(s) that follow. Figure 23.1 -Refer to Figure 23.1. A(n) in the amount of this household makes when this household's income is zero shifts the saving function downward.

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If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $ and his saving rises by $.

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