Question : 91) Consider a simple macro model with a constant price : 1384373

91) Consider a simple macro model with a constant price level and demand-determined output. In such a model, the level of national income will

A) tend to rise if desired aggregate expenditure is less than actual national income.

B) remain constant if savings equals consumption.

C) be in equilibrium if all of the resources of the economy are fully employed.

D) remain constant if firms are accumulating inventories.

E) tend to rise if firms have unplanned decumulation of inventories.

92) If national income is demand-determined, the condition for national income to be in equilibrium can be stated as

A) unemployment must equal the natural unemployment rate.

B) AE must be greater than Y.

C) desired saving equals actual investment.

D) actual saving equals actual investment.

E) desired aggregate expenditure equals the actual level of national income.

93) Consider the simplest macro model with a constant price level and demand-determined output. If national income is less than its equilibrium level, it is likely that firms’ inventories are ________, and so national income tends to ________.

A) accumulating; rise

B) accumulating; fall

C) being depleted; rise

D) being depleted; fall

E) constant; fall

94) Consider a simple macro model with a constant price level and demand-determined output. If national income is above its equilibrium level, it is likely that inventories are ________, and so national income tends to ________.

A) accumulating; rise

B) accumulating; fall

C) being depleted; rise

D) being depleted; fall

E) constant: fall

95) Refer to Table 21-5. The equilibrium level of national income is

A) $375.

B) $249.

C) $155.

D) $75.

E) $93.75.

96) Refer to Table 21-5. At the equilibrium level of national income, what is the level of desired consumption expenditures?

A) $68.75

B) $125

C) $150

D) $350

E) $375

97) Refer to Table 21-5. At the equilibrium level of national income, the level of desired saving will be

A) equal to consumption expenditures.

B) $375.

C) $50.

D) $25.

E) $0

98) Consider a simple macro model with a constant price level and demand-determined output. Suppose the level of actual national income is less than desired aggregate expenditure. In this case,

A) inventories will build up, causing national income to rise.

B) national income will fall, because desired expenditures are less than actual expenditures.

C) shortages of goods and reductions in inventories will cause producers to increase output and national income to rise.

D) national income may increase or decrease, depending on the relative sizes of the average propensity to consume and the average propensity to save.

E) there will be no change in national income because only actual expenditure is relevant.

99) Consider a simple macro model with a constant price level and demand-determined output. Suppose desired aggregate expenditures are less than the current level of national income. The vertical distance between the AE curve and the 45-degree line represents

A) desired accumulation of inventories.

B) desired decumulation of inventories.

C) the amount by which output exceeds desired expenditures.

D) the output gap.

E) the amount by which desired expenditures exceeds output.

100) Consider a simple macro model with a constant price level and demand-determined output. If the simple multiplier is 3 and there is a $2 million increase in autonomous investment spending, then the equilibrium level of income will increase by

A) $1.2 million.

B) $2 million

C) $3 million.

D) $4.5 million.

E) $6 million.