Question : 61) Suppose there an increase in the marginal propensity to : 1384370

61) Suppose there is an increase in the marginal propensity to spend out of national income. The result will be

A) a movement to the right along the AE curve.

B) a movement to the left along the AE curve.

C) an increase in the slope of the AE curve.

D) a decrease in the slope of the AE curve.

E) a parallel upward shift in the AE curve.

62) A decrease in the marginal propensity to spend out of national income will cause

A) a movement to the right along the AE curve.

B) a movement to the left along the AE curve.

C) an increase in the slope of the AE curve, which rotates it upward.

D) a decrease in the slope of the AE curve, which rotates it downward.

E) a parallel downward shift in the AE curve.

63) Refer to Figure 21-3. Assuming AE0 is the prevailing aggregate expenditure function, the distance 0A is a measure of

A) aggregate expenditure at equilibrium national income.

B) autonomous desired expenditures.

C) induced expenditures.

D) desired saving.

E) desired investment.

64) Refer to Figure 21-3. Assuming AE0 is the prevailing aggregate expenditure function, at a level of national income equal to Y3 we can state that

A) consumption is greater than desired aggregate expenditure.

B) consumption is less than desired aggregate expenditure.

C) desired aggregate expenditure is greater than output.

D) desired aggregate expenditure is less than output.

E) desired saving is less than zero.

65) Refer to Figure 21-3. In this demand-determined model of the macro economy, the price level is

A) measured by Y2/0B.

B) measured by Y1Y2/AB.

C) increasing as the economy moves from E0 to E1.

D) assumed to be constant.

E) derived from the slope of the AE function.

66) Refer to Figure 21-3. If national income is Y1 and the aggregate expenditure function is AE1, then desired aggregate expenditure

A) exceeds income and income will rise.

B) exceeds income and income will fall.

C) is less than income and income will rise.

D) is equal to income and income will not change.

E) is less than income and income will fall.

67) Refer to Figure 21-3. If national income is Y3 and the aggregate expenditure function is AE1,

A) the economy is in equilibrium.

B) there is unintended inventory accumulation and income will rise.

C) there is unintended inventory accumulation and income will fall.

D) there is unintended inventory decumulation and income will rise.

E) there is unintended inventory decumulation and income will fall.

68) Refer to Figure 21-3. If national income is Y1 and the aggregate expenditure function is AE1,

A) the economy is in equilibrium.

B) there is unintended inventory accumulation and income will rise.

C) there is unintended inventory accumulation and income will fall.

D) there is unintended inventory decumulation and income will rise.

E) there is unintended inventory decumulation and income will fall.

69) The aggregate expenditure (AE) function is an upward-sloping curve that describes

A) the amount spent on an economy’s output at each national income.

B) what firms and households would like to spend at each level of national income.

C) what an economy would like to spend, in the absence of income constraints, at each level of output.

D) what is actually spent on an economy’s output at each level of output.

E) what is actually spent at each level of national income.

70) In general, the marginal propensity to spend is the change in total desired expenditure induced by a change in ________ whereas the marginal propensity to consume is the change in desired consumption expenditure induced by a change in ________. In the case of the simplest macro model with no government and no international trade, however, the marginal propensity to spend is ________ the marginal propensity to consume.

A) national income; disposable income; greater than

B) national income; disposable income; equal to

C) disposable income; national income; equal to

D) disposable income; national income; greater than

E) national income; disposable income; smaller than