Question :
101) Consider a model with demand-determined output and a constant : 1384389
101) Consider a model with demand-determined output and a constant price level. A decrease in the net tax rate causes ________ in autonomous spending and a ________ in the simple multiplier.
A) a rise; rise
B) a rise; fall
C) no change; rise
D) no change; fall
E) a fall; fall
102) Suppose output is demand determined. An increase in the net tax rate ________ the marginal propensity to spend and thus ________ the simple multiplier.
A) raises; raises
B) raises; lowers
C) causes no change in; raises
D) lowers; lowers
E) lowers; raises
103) Suppose aggregate output is demand determined. If the marginal propensity to spend is 0.5, and the MPC is 0.7, a $1 billion reduction in government purchases will cause equilibrium national income to ________ by ________.
A) decrease; $3.33 billion
B) decrease; $2.00 billion
C) decrease; $1.50 billion
D) increase; $2.00 billion
E) increase; $3.33 billion
104) In a simple macro model with government and demand-determined output, to raise equilibrium national income by $100 billion, G must be
A) raised by $100 billion.
B) raised by $100 billion times the simple multiplier.
C) raised by $100 billion divided by the simple multiplier.
D) lowered by $100 billion times the simple multiplier.
E) lowered by $100 billion divided by the simple multiplier.
105) Consider a simple macro model with government and demand-determined output. If the government wants to reduce equilibrium national income by $20 billion, G must be
A) raised by $20 billion times the simple multiplier.
B) raised by $20 billion divided by the simple multiplier.
C) lowered by $20 billion times the simple multiplier.
D) lowered by $20 billion divided by the simple multiplier.
E) lowered by $20 billion.
106) Refer to Figure 22-3. The rotation from AE0 to AE1 implies that the marginal propensity to spend ________ and the value of the simple multiplier ________.
A) increases; decreases
B) increases; increases
C) remains the same; increases
D) decreases; increases
E) decreases, decreases
107) Consider a macro model with a constant price level and demand-determined output. A rise in the net tax rate ________ the simple multiplier and ________ equilibrium national income.
A) lowers; has no effect on
B) lowers; lowers
C) lowers; raises
D) raises; raises
E) raises; has no effect on
108) Consider a simple macro model with government and foreign trade and where the price level is taken as given. The simple multiplier is equal to
A) 1/(1-MPC).
B) 1/MPC.
C) 1/(1- MPS – t).
D) 1/(1 – (MPC(1 – t)- m )).
E) 1/(1- (MPS(1 – t)- m )).
109) Consider a simple macro model with demand-determined output and the following specific parameter values:
A) 1.67; 1.33
B) 1.67; 4
C) 2.5; 1.33
D) 2.5; 2.5
E) 2.5; 4
110) Consider the simplest macro with demand-determined output. If the marginal propensity to consume out of disposable income (MPC) is equal to the marginal propensity to spend out of national income (z), then
A) the marginal propensity to import (m) is larger than the tax rate (t).
B) the marginal propensity to import (m) is smaller than the tax rate (t).
C) the simple multiplier is smaller in a closed economy with no government.
D) the simple multiplier is larger in a closed economy with no government.
E) there is no effect on the simple multiplier from imports or tax rates.
