Suppose that an economy is in equilibrium at a real GDP of $10 trillion at a price level of 100. An increase in autonomous expenditures of $0.30 trillion takes place. The current multiplier is 10. If the the new equilibrium value of real GDP will be OA. $0.30 billion. OB. $3.00 trillion. OC. $13.00 trillion. O D. $10.30 trillion. Suppose that an economy is in equilibrium at a real GDP of $10 trillion at a price level of 100. The short-run aggregate supply curve is upward-sloping and there is an increase in autonomous exper expenditures enabled the real GDP to increase to $10.50 trillion. The change in the price level has changed the multiplier to OA. 1.667. OB. 9.70. OC. 8.58. O D. 5.722.

Suppose that an economy is in equilibrium at a real GDP of $10 trillion at a price level of 100. An increase in autonomous expenditures of $0.30 trillion takes place. The current multiplier is 10. If the the new equilibrium value of real GDP will be OA. $0.30 billion. OB. $3.00 trillion. OC. $13.00 trillion. O D. $10.30 trillion. Suppose that an economy is in equilibrium at a real GDP of $10 trillion at a price level of 100. The short-run aggregate supply curve is upward-sloping and there is an increase in autonomous exper expenditures enabled the real GDP to increase to $10.50 trillion. The change in the price level has changed the multiplier to OA. 1.667. OB. 9.70. OC. 8.58. O D. 5.722.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following is true? OA. Potential GDP decreases as the price level increases. OB. The potential GDP line has a negative slope. OC. Aggregate supply is another name for potential GDP. OD. At full employment, aggregate supply is equal to potential GDP. O E. Potential GDP increases as the price level increases.
In a model with a constant price level and demand- determined output, the multiplier is larger, the... a. Lower the APC. O b. Lower the level of autonomous expenditures. O c. Higher the level of autonomous expenditures. O d. Flatter is the AE function. O e. Steeper is the AE function.
If, in an economy, a $200 billion increase in consumption spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the marginal propensity to consume and the multiplier are, respectively, 08 and 5.0. O 0.4 and 2.5. O 0.4 and 1.67. O 0.2 and 1.25.
7. Problems and Applications Q7 Suppose economists observe that an increase in government spending of $14 billion raises the total demand for goods and services by $42 billion. If these economists ignore the possibility of crowding out, they would estimate the marginal propensity to consume (MPC) to be Now suppose the economists allow for crowding out. Their new estimate of the MPC would be than their initial one.
b.makes prices "sticky." O c. maximizes its volatility. O d. automatically reduces recessionary trends. QUESTION 5 An increase in taxes shifts the O a. aggregate supply curve outward. O b. consumption schedule downward. O c. aggregate demand curve outward. O d. consumption schedule upward.
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1. Aggregate expenditures and income The following table shows consumption (C), investment (1), government spending (G), and net exports (X-M) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars. Compute aggregate expenditures for each income level and fill in the last column In the following table. Y с G 500 525 250 150 600 550 250 150 575 250 150 600 250 150 -200 900 625 250 150 -200 700 800 AL AGGREGATE EXPENDITURES (Billions of dollars) The following graph shows real GDP on the horizontal axis and aggregate expenditures (AE) on the vertical axis. The orange line (square symbols) represents a 45-degree (Y-AE) line. 1000 Use the blue points (circle symbol) to plot the aggregate expenditures line for this economy. Line segments will automatically connect the points. 900 300 I 700 X-M Aggregate Expenditures -200 725 -200 750 775 800 825 600 500 + -200 AE line *+…
Which shows income and consumption levels for period 1 through 7, what is the marginal propensity to consume ?
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Which of the following is true? O An increase in aggregate demand is the same as a downward shift in the total expenditure function O An increase in aggregate demand is the same as an increase in aggregate supply O An inward shift of the aggregate demand curve is the same as an upward shift in the total expenditure function O An increase in aggregate demand is the same as an upward shift in the total expenditure function