The aggregate expenditure curve shows the relationship between aggregate planned expenditure and Select one: A. consumption expenditure. O B. real GDP. C. the price level. D. the interest rate. O E. disposable income.
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Q: aggregate expenditure
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- Which one of the following statements about consumption spending is incorrect? A. Spending on non-durable goods such as food is the most stable component of consumption spending. B. Spending on durable goods is the most erratic or volatile component of consumption spending. O C. Consumption spending is determined largely by total income in the economy. O D. Part of consumption spending consists of spending on services. E. There is a strong inverse relationship between consumption spending and total income in the economywhich seems to be correct?Potential GDP Aggregate expenditure AE, E, 45° Y. Real GDP (Y) When real GDP is greater than Yo in the diagram above: O A. inventories will decrease OB. O B: Aggregate expenditure will be less than Real GDP OC. Aggregate expenditure will be equal to Real GDP OD. -inventories will increase Aggregate Expenditure
- QUESTION 6 Potential GDP Aggregate expenditure AE, 45° Y. Real GDP (Y) When real GDP is greater than Yo in the diagram above: O A. - inventories will decrease OB. ·Aggregate expenditure will be less than Real GDP OC. Aggregate expenditure will be equal to Real GDP OD. O D. inventories will increase QUESTION 7 Y G Xn $1,000 $1,400 1,400 1,400 1,400 1,400 $0 $800 -$200 2,500 5,000 7,500 10,000 2,300 3,800 5,300 6,800 1,000 1,000 1,000 1,000 -200 -200 -200 -200 Suppose you are given the data in the table above for a hypothetical economy. All data are in billions of dollars. Yis actual real GDP, and C, Ip, G, and Xn are the consumption, planned investment, government purchases, and net exports components of aggregate expenditures, respectively. Calculate the equilibrium GDP (give your answer in billions of $) Aggregate ExpenditureWhich of the following best describes aggregate expenditure? O a. C+I+G+ (X+ M) b. C+I+T+(X+M) Oc. C+S+G+ (X- M) Od. C+I+G+(X- M) O e. C+I+T+(X– M)One of these four answers best explains the effect of disposable income on consumption. Which one? O Disposable income does not determine consumption. O Disposable income is the most powerful determinant of income and determines how much an individual consumes. O When an individual has more disposable income, he or she is likely to consume less. O Disposable income is an important determinant of expected future income.
- Which of the following is NOT a component of planned aggregate expenditure? Select one: O a. Planned investment O b. Government purchases O c. Transfer payments d. Net exports O e. ConsumptionHow will an increase in taxes applied to businesses affect the GDP based on the Expenditure Approach? O a. Negative effect on net exports O b. Negative effect on the gross domestic capital formation O c. Increase in government's budget O d. Positive effect on private consumptionWhich curve is drawn at 45 degree to show income and consumption relationship? O a. Y=C O b. Y=S O c. S=Y-C O d. C= a+ By
- Classify each of the following items as a final good or service or an intermediate good or service, and identify which is a component of cons government expenditure on goods and services. A. A new limousine for the president B. Banking services bought by a student C. New airplanes bought by United Airlines D. Packing boxes bought by Amazon.com O 1. A is an intermediate good, B is a final service that is consumption expenditure, C is a final good that is investment, and D is a final good that is investment. O2. A is a final good that is government expenditure, B is a final service that is consumption expenditure, C is a final good that is consumption expenditure, and D is a final good that is investment. O 3. A is an intermediate good, B is a final service that is investment, C is a final good that is investment, and D is an intermediate good. O4. A is a final good that is government expenditure, B is a final service that is consumption expenditure, C is a final good that is investment,…All of the following are components of aggregate expenditure except Select one: O real GDP a. actual government purchases O b. net export O c. planned investment 45 The largest source of government revenues is.Classify each of the following items as a final good or an intermediate good, and identify whether it is a component of consumption expenditure, investment, or government expenditure on goods and services: Item 1. Packing boxes bought by Amazon.com. Item 2. Starbuck's grande mocha frappuccino bought by a student. Item 3. A new limousine for the president. Item 4. New airplanes bought by United Airlines. Item 1 is and item 2 is O A. an intermediate good; a final good that is consumption expenditure B. a final good that is consumption expenditure; a final good that is consumption expenditure C. a final good that is consumption expenditure; a final good that is investment D. an intermediate good; a final good that is investment Item 3 is and item 4 is O A. an intermediate good; an intermediate good O B. a final good that is government expenditure; a final good that is investment O C. an intermediate good; a final good that is investment D. a final good that is government expenditure; an…