101) Consider an exogenous increase in the real interest rate in the simple macro model. This will tend to cause ________ in desired consumption and ________ in desired investment.
A) an increase; an increase
B) an increase; a decrease
C) a decrease; a decrease
D) a decrease; no change
E) a decrease; an increase
102) Consider a simple macro model with a constant price level and demand-determined output. In such a model, a downward shift of the saving function causes equilibrium national income to
A) fall because the AE function shifts downward simultaneously.
B) rise because the AE function shifts upward simultaneously.
C) remain constant but consist of more consumption and less investment.
D) remain constant but consist of less consumption and more investment.
E) remain constant because it does not affect desired aggregate expenditure.
103) Consider the simplest macro model with a constant price level and demand-determined output. In such a model, an upward shift of the saving function causes equilibrium national income to
A) fall because the AE function shifts downward simultaneously.
B) rise because the AE function shifts upward simultaneously.
C) remain constant but consist of more consumption and less investment.
D) remain constant but consist of less consumption and more investment.
E) remain constant because it does not affect desired aggregate expenditure.
104) Refer to Figure 21-3. A shift in the aggregate expenditure function from AE0 to AE1 could be caused by
A) a rise in the multiplier.
B) a fall in the marginal propensity to consume.
C) a rise in the marginal propensity to consume.
D) an increase in desired investment expenditures.
E) a decrease in desired investment expenditures.
105) Refer to Figure 21-3. A shift in the aggregate expenditure function downward from AE1 to AE0 could be caused by
A) a rise in the multiplier.
B) a fall in the marginal propensity to consume.
C) a rise in the marginal propensity to consume.
D) an increase in autonomous desired saving.
E) a decrease in autonomous desired saving.
106) Refer to Figure 21-3. The simple multiplier could be measured by the ratio
A) /0A.
B) /0B.
C) /AB.
D) BA/Y1.
E) 1/(Y2 – Y1).
107) Consider the simplest macro model with demand-determined output. Suppose an increase in business confidence leads firms to increase investment in new equipment by $100 million. The marginal propensity to spend in this economy is 0.75. What is the increase in expenditure in this economy during the initial first round of spending?
A) $75 million
B) $25 million
C) $100 million
D) $400 million
E) $500 million
108) Consider the simplest macro model with demand-determined output. Suppose an increase in business confidence leads firms to increase investment in new equipment by $100 million. The marginal propensity to spend in this economy is 0.75. What is the increase in expenditure in this economy during the second round of spending?
A) $25 million
B) $100 million
C) $400 million
D) $75 million
E) $500 million
109) Consider the simplest macro model with demand-determined output. Suppose an increase in business confidence leads firms to increase investment in new equipment by $100 million. The marginal propensity to spend in this economy is 0.75. What is the eventual total new expenditure in this economy due to the increase in investment?
A) $75 million
B) $100 million
C) $25 million
D) $500 million
E) $400 million
110) The simple multiplier, which applies to short-run situations in which the price level is constant, describes changes in
A) investment induced by changes in equilibrium income.
B) saving caused by changes in investment.
C) the equilibrium level of national income caused by changes in autonomous expenditure.
D) the rate of interest caused by increased demand for credit.
E) employment induced by changes in equilibrium income.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more