Question : 51) During 2013, a country reported that its real GDP : 1238161

51) During 2013, a country reported that its real GDP increased by $3.0 billion. If the slope of its aggregate planned expenditure curve is 0.9, then which of the following might have led to the increase in real GDP?

A) Exports decreased by $0.3 billion.

B) Exports increased by $0.3 billion.

C) Imports increased by $0.3 billion.

D) Government expenditure on goods and services increased by $3 billion.

E) Investment decreased by $0.3 billion.

52) As the economy turns the corner into a recession, the level of unplanned inventories ________ and firms ________ production.

A) increases; begin to decrease

B) increases; begin to increase

C) decreases; begin to decrease

D) decreases; begin to increase

E) increases; do not change

53) During the start of an expansion, aggregate planned expenditure

A) increases the magnitude of the expenditure multiplier.

B) decreases the magnitude of the expenditure multiplier.

C) exceeds real GDP.

D) is less than real GDP.

E) is slowly decreasing.

54) ________ can trigger a recession.

A) An increase in autonomous expenditure

B) A decrease in autonomous expenditure

C) Equality between aggregate expenditure and real GDP

D) An increase in the expenditure multiplier

E) An increase in induced expenditure

55) ________ can trigger an expansion.

A) An increase in autonomous expenditure

B) A decrease in autonomous expenditure

C) Equality between aggregate expenditure and real GDP

D) A decrease in induced expenditure

E) A downward shift of the AE line

56) The multiplier effect

A) explains what causes a recession.

B) explains what causes an expansion.

C) explains how the economy recovers from a recession.

D) reinforces the negative effects of any reduction in spending.

E) has no impact on equilibrium expenditure.

57) If the economy is in the expansion phase of a business cycle and investment increases, when the multiplier effect kicks in, the expansion

A) picks up speed.

B) slows down.

C) peaks.

D) is not effected.

E) reverses.

58) An insight into business cycles is gained by the fact that

A) at a peak, autonomous expenditure increases, thereby leading to a recession.

B) at a trough, induced expenditure decreases, thereby leading to an expansion.

C) at a peak, a decrease in autonomous expenditure leads to a decrease in induced expenditure.

D) changes in real GDP result in changes in autonomous expenditures.

E) autonomous expenditure does not change at either a peak or a trough.

59) The expenditure multiplier is equal to the change in ________ divided by the change in ________.

A) autonomous expenditure; equilibrium expenditure

B) dependent expenditure; autonomous expenditure

C) real GDP; equilibrium expenditure

D) equilibrium expenditure; autonomous expenditure

E) the price level; real GDP

60) The expenditure multiplier is larger than one because

A) an increase in autonomous expenditure induces further increases in aggregate expenditure.

B) additional expenditure induces lower incomes.

C) an increase in autonomous expenditure brings about a reduction in the real interest rate.

D) an increase in autonomous expenditure induces further decreases in aggregate expenditure.

E) the price level rises, thereby reinforcing the initial effect.