Question : 31) Refer to Figure 8.9. At aggregate output level $100 : 1381119

 

31) Refer to Figure 8.9. At aggregate output level $100 million, there is a

A) $75 million unplanned increase in inventories.

B) $75 million unplanned decrease in inventories.

C) $100 million decrease in inventories.

D) $100 million increase in inventories.

 

32) Refer to Figure 8.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result of a decrease in investment by $20 million?

A) AE line shifts down, increasing equilibrium output and equilibrium expenditure.

B) AE line shifts up, increasing equilibrium output and equilibrium expenditure.

C) AE line shifts down, decreasing equilibrium output and equilibrium expenditure.

D) AE line shifts down, increasing equilibrium output and decreasing equilibrium expenditure.

Refer to the information provided in Figure 8.10 below to answer the questions that follow.

 

 

Figure 8.10

 

33) Refer to Figure 8.10. What is the equation for the aggregate expenditure function (AE)?

A) AE = 600 + 0.1Y.

B) AE = 200 + 0.8Y.

C) AE = 550 + 0.8Y.

D) AE = 100 + 0.9Y.

 

34) Refer to Figure 8.10. At an aggregate output level of $500 million, there is a

A) $100 million unplanned increase in inventories.

B) $175 million unplanned decrease in inventories.

C) $0 change in unplanned inventories.

D) $100 million unplanned decrease in inventories.

 

35) Refer to Figure 8.10. At aggregate output levels above $1,000 million, there are

A) unplanned increases in inventories and output increases.

B) unplanned decreases in inventories and output increases.

C) unplanned decreases in inventories and output decreases.

D) unplanned increases in inventories and output decreases.

36) Refer to Figure 8.10. At aggregate output levels below $1,000 million, there are

A) unplanned decreases in inventories and output increases.

B) unplanned increases in inventories and output increases.

C) unplanned increases in inventories and output decreases.

D) unplanned decreases in inventories and output decreases.

 

37) Using the saving/investment approach to equilibrium, the equilibrium condition can be written as

A) C + I = C + S.

B) C = S + I.

C) C – S = I.

D) C + S = I.

 

38) Firms react to unplanned inventory reductions by

A) reducing output.

B) increasing output.

C) reducing planned investment.

D) increasing consumption.

 

39) Firms react to unplanned increases in inventories by

A) reducing output.

B) increasing output.

C) increasing planned investment.

D) increasing consumption.

40) Aggregate output will increase if there is a(n)

A) increase in saving.

B) unplanned rise in inventories.

C) unplanned fall in inventories.

D) decrease in consumption.

 

41) A decrease in planned investment causes

A) output to increase.

B) output to decrease, but by a smaller amount than the decrease in investment.

C) output to decrease, but by a larger amount than the decrease in investment.

D) output to decrease by an amount equal to the decrease in investment.

 

 

 

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