Question : 111.Assuming aggregate demand represented by AD3, the economy depicted in : 1232940

 

 

 

 

  

 

111.Assuming aggregate demand is represented by AD3, the economy depicted in Figure 12.1 confronts a real GDP gap of:   

A. Zero.

 

B. $400 billion.

 

C. $520 billion.

 

D. $560 billion.

112.Assuming aggregate demand is represented by AD1, the economy depicted in Figure 12.1 confronts a real GDP gap of:   

A. Zero.

B. $400 billion.

C. $800 billion.

D. $560 billion.

6.0 trillion – 5.6 trillion = 400 billion.

113.Assuming aggregate demand is represented by AD1, the equilibrium level of income in Figure 12.1 is:   

A. $800 billion.

B. $5.2 trillion.

C. $5.6 trillion.

D. $6.0 trillion.

114.In Figure 12.1, assume aggregate demand is represented by AD2. Which of the following could cause a shift to AD3?   

A. An increase in government spending on goods and services

B. An increase in consumer spending

C. An increase in taxes

D. An increase in investment spending

115.In Figure 12.1, assume aggregate demand is represented by AD3. Which of the following could cause a shift to AD2?   

A. An increase in government spending on goods and services

B. An increase in taxes

C. A decrease in consumer confidence

D. A decrease in investment spending

 

 

116.Using Figure 12.2, if Q3 represents full employment, then a shift from AD1 to:   

A. AD2 will result in a full-employment equilibrium at point Y.

B. AD2 will close the GDP gap.

C. AD3 will take the economy past full employment to equilibrium at point Z.

D. AD3 will result in a full-employment equilibrium at point X.

117.Using Figure 12.2, if Q2 represents full employment, then a shift from AD1 to:   

A. AD2 takes the economy past full employment to equilibrium at point Y.

B. AD2 closes the GDP gap.

C. AD3 results in a full-employment equilibrium at point W.

D. AD3 takes the economy past full employment to equilibrium at point Z.

118.Using Figure 12.2, assume that Q2 is full employment and the economy is in equilibrium at point V. Ceteris paribus a shift in aggregate demand to AD2 will:   

A. Result in equilibrium at point W.

B. Result in equilibrium at point Y.

C. Reduce the GDP gap but would not close it.

D. Cause an AD shortfall.

119.Using Figure 12.2, which fiscal policy action would increase aggregate demand from AD1 to AD2 ceteris paribus?   

A. A decrease in transfer payments

B. A decrease in taxes

C. A decrease in government spending

D. An increase in saving

120.Using Figure 12.2, which fiscal policy action will increase aggregate demand from AD2 to AD3 ceteris paribus?   

A. An increase in consumption

B. An increase in taxes

C. A decrease in exports

D. A decrease in government spending

121.One News Wire article in the text says, “After years of living happily beyond their means, Americans are finally facing financial reality.” Ceteris paribus, a decrease in consumer spending will result in:   

A. An increase in the MPS.

B. A rightward shift of the aggregate supply curve.

C. A leftward shift of the aggregate demand curve.

D. An increase in taxes.

122.One News Wire article in the text says, “After years of living happily beyond their means, Americans are finally facing financial reality.” Ceteris paribus, a decrease in consumer confidence will result in:   

A. An increase in consumer spending.

B. A rightward shift of the aggregate demand curve.

C. An increase in the equilibrium price level.

D. A decrease in the equilibrium level of output.

 

 

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