Question :
1) With respect to consumption, investment, government purchases and net : 1384364
1) With respect to consumption, investment, government purchases and net exports, the national-income and product accounts measure
A) desired expenditures in each of the categories.
B) both actual and desired expenditures, since actual expenditure must equal desired expenditure in each category.
C) the flow of saving at any income.
D) neither actual nor desired expenditures.
E) actual expenditures in each of the categories.
2) For firms or individual households, desired expenditure is
A) always greater than planned expenditure.
B) always greater than actual expenditure.
C) not relevant because human wants are unlimited.
D) what they plan on spending, given the resources at their command.
E) not a useful concept because it cannot be measured.
3) In the simple macroeconomic model, “autonomous expenditures” are
A) dependent on national income.
B) not dependent on national income.
C) induced expenditures.
D) those which are constant.
E) non-domestic expenditures.
4) Undesired or unplanned inventory accumulation is likely to occur when
A) consumption exceeds investment.
B) investment exceeds consumption.
C) autonomous expenditure exceeds induced expenditure.
D) desired aggregate expenditure exceeds actual aggregate expenditure.
E) actual aggregate expenditure exceeds desired aggregate expenditure.
5) Undesired or unplanned inventory decumulation is likely to occur when
A) consumption exceeds investment.
B) investment exceeds consumption.
C) autonomous expenditure exceeds induced expenditure.
D) desired aggregate expenditure exceeds actual aggregate expenditure.
E) actual aggregate expenditure exceeds desired aggregate expenditure.
6) In each of the four expenditure categories, national income accounts measure ________ expenditures, while the theoretical model of the economy deals with ________ expenditures.
A) actual; autonomous
B) desired; actual
C) induced; exogenous
D) endogenous; exogenous
E) actual; desired
7) Consider the equation: AE = C + I + G + (X – IM). Which of the following statements correctly describes this sum?
A) It is a summation of the desired expenditures on domestically produced output.
B) It is a summation of actual expenditures and is equivalent to GDP.
C) It is a summation of planned expenditures and is equal to nominal GDP.
D) It is a summation of planned expenditures and is always equal to real GDP.
E) It is a summation of the desired expenditures of domestic households, firms and government.
8) In macroeconomics, the consumption function
A) and the aggregate expenditure function are the same.
B) describes the relationship between desired consumption expenditure and the factors that determine it, like national income.
C) refers to the relationship between consumption expenditure and relative prices.
D) refers to the relationship between an individual’s consumption and his/her wealth.
E) is relatively unimportant in macroeconomics, because consumption is such a small component of aggregate expenditure.
9) The consumption function is based on the assumption that as real disposable income rises, aggregate desired consumption
A) will fall and desired saving will rise.
B) will rise and desired saving will fall.
C) and desired saving will both rise.
D) remains constant and desired saving will rise.
E) remains constant and desired saving will fall.
10) In a simple macro model, an increase in households’ wealth is generally assumed to
A) cause no change in desired consumption because consumption is a function of disposable income only.
B) cause no change in desired consumption because the increase is always expected.
C) cause a downward shift in the aggregate consumption function.
D) cause an upward shift in the aggregate consumption function.
E) affect only desired saving, not desired consumption.
