ECON ASSIGNMENT 6 - Assignment Essays

question

Macroeconomic equilibrium in the short run always occurs at full-employment GDP.
T/F

answer

FALSE

question

The short-run aggregate supply curve shows the:

answer

Direct relationship between the price level and real GDP produced

question

To close an inflationary expenditure gap of $20 billion in an economy with a marginal propensity to consume of 0.8, it would be necessary to:

answer

To close an inflationary expenditure gap of $20 billion in an economy with a marginal propensity to consume of 0.8, it would be necessary to:

question

Refer to the above table. If a government sector is introduced and a lump-sum tax of $30 billion is imposed at all levels of GDP, then the consumption column in the table becomes:

answer

$426, 466, 506, 546, 586

question

In the aggregate expenditures model of a private closed economy, we analyze a consumption schedule and an investment schedule both of which indicate that as income increases then consumption and investment will increase.
T/F

answer

FALSE

question

When there are unplanned increases in inventories, then actual investment ends up being less than planned investment.
T/F

answer

FALSE

question

The real-balance effect explains a shift in aggregate demand, while the wealth effect explains a movement along the AD curve.
T/F

answer

FALSE

question

Refer to the table above. If planned investment is $15 billion, then at the $560 billion level of output, there will be a(n):

answer

Unplanned decrease in inventories of $10 billion

question

Which event would most likely decrease an economy's exports?

answer

An appreciation of the nation's currency relative to foreign currencies

question

If households and firms in an economy would save all extra income that they receive so that MPC = 0, then the multiplier in that economy is zero.
T/F

answer

FALSE

question

Collective bargaining agreements that prohibit wage cuts for the duration of the contract contribute to:

answer

A price level that is inflexible downward

question

If at a particular price level, real output from producers is greater than real output desired by purchasers, then there will be a general:

answer

Surplus and the price level will fall

question

Minimum wage laws tend to make the price level more flexible rather than less flexible.
T/F

answer

FALSE

question

A downward-sloping investment demand curve and a horizontal investment schedule indicate that investments are inversely related to interest rates but are not affected by the level of income.
T/F

answer

TRUE

question

The equivalent of the aggregate supply curve in the aggregate expenditures model is the 45-degree line.
T/F

answer

TRUE

question

The short-run version of aggregate supply assumes that product prices are:

answer

Flexible while resource prices are fixed

question

An increase in the price level reduces the real value of financial assets with fixed money values and, as a result, the holders of these assets decrease their spending.
T/F

answer

TRUE

question

A movement upward along a given aggregate demand curve is equivalent to a(n):

answer

Downward shift in the aggregate expenditures schedule

question

In a private closed economy, the equilibrium condition for the economy is:

answer

AE = C + Ig = GDP

question

In the aggregate expenditures model of a private closed economy, if aggregate expenditures are greater than output or income, then real GDP will increase towards its equilibrium level.
T/F

answer

TRUE

1 of 20

question

Macroeconomic equilibrium in the short run always occurs at full-employment GDP.
T/F

answer

FALSE

question

The short-run aggregate supply curve shows the:

answer

Direct relationship between the price level and real GDP produced

question

To close an inflationary expenditure gap of $20 billion in an economy with a marginal propensity to consume of 0.8, it would be necessary to:

answer

To close an inflationary expenditure gap of $20 billion in an economy with a marginal propensity to consume of 0.8, it would be necessary to:

question

Refer to the above table. If a government sector is introduced and a lump-sum tax of $30 billion is imposed at all levels of GDP, then the consumption column in the table becomes:

answer

$426, 466, 506, 546, 586

question

answer

FALSE

question

When there are unplanned increases in inventories, then actual investment ends up being less than planned investment.
T/F

answer

FALSE

question

The real-balance effect explains a shift in aggregate demand, while the wealth effect explains a movement along the AD curve.
T/F

answer

FALSE

question

Refer to the table above. If planned investment is $15 billion, then at the $560 billion level of output, there will be a(n):

answer

Unplanned decrease in inventories of $10 billion

question

Which event would most likely decrease an economy's exports?

answer

An appreciation of the nation's currency relative to foreign currencies

question

If households and firms in an economy would save all extra income that they receive so that MPC = 0, then the multiplier in that economy is zero.
T/F

answer

FALSE

question

Collective bargaining agreements that prohibit wage cuts for the duration of the contract contribute to:

answer

A price level that is inflexible downward

question

If at a particular price level, real output from producers is greater than real output desired by purchasers, then there will be a general:

answer

Surplus and the price level will fall

question

Minimum wage laws tend to make the price level more flexible rather than less flexible.
T/F

answer

FALSE

question

A downward-sloping investment demand curve and a horizontal investment schedule indicate that investments are inversely related to interest rates but are not affected by the level of income.
T/F

answer

TRUE

question

The equivalent of the aggregate supply curve in the aggregate expenditures model is the 45-degree line.
T/F

answer

TRUE

question

The short-run version of aggregate supply assumes that product prices are:

answer

Flexible while resource prices are fixed

question

An increase in the price level reduces the real value of financial assets with fixed money values and, as a result, the holders of these assets decrease their spending.
T/F

answer

TRUE

question

A movement upward along a given aggregate demand curve is equivalent to a(n):

answer

Downward shift in the aggregate expenditures schedule

question

In a private closed economy, the equilibrium condition for the economy is:

answer

AE = C + Ig = GDP

question

In the aggregate expenditures model of a private closed economy, if aggregate expenditures are greater than output or income, then real GDP will increase towards its equilibrium level.
T/F

answer

TRUE

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