Answered: Yo Which one of the following…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Study the diagram below and answer the question.
Which one of the following statements is false?

A Y1 represents the equilibrium level of income.
B The curve labelled A = C + I shows the total of consumption and investment spending.
C The curve labelled C shows the total of autonomous and induced consumption spending.
D The point labelled D shows where savings equal investment.

In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregate
production of income by Y. Which one of the following statements is incorrect?
A When A is greater than Y, there is disequilibrium and Y will tend to increase.
B When A is equal to Y, there is equilibrium and Y will remain unchanged.
C When A is less than Y, there is disequilibrium and Y will decrease.
D When A is greater than Y, there is disequilibrium and A will decrease.

2. In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregate
production of income by Y. Which one of the following statements is incorrect?
A
When A is greater than Y, there is disequilibrium and Y will tend to increase.
When A is equal to Y, there is equilibrium and Y will remain unchanged.
C When A is less than Y, there is disequilibrium and Y will decrease.
When A is greater than Y, there is disequilibrium and A will decrease.
3. Simon borrowed R10 000 from the bank at the end of 2011 at a fixed interest rate of 20%. At the end of 2012,
_to Simon; the real value of his loan plus interest
inflation rate was 25%. Inflation has been
payments changed to
A Beneficial; R9 600
B Beneficial; R4 800
C Beneficial; R8 000
D Costly; R12 500

1. Study the diagram below and answer the question.
A
A = C+i
C+
Y
Yo
Y1
Which one of the following statements is false?
Y1 represents the equilibrium level of income.
The curve labelled A = C + I shows the total of consumption and investment spending.
The curve labelled C shows the total of autonomous and induced consumption spending.
The point labelled D shows where savings equal investment.
C

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