Question 1

Which of the following would reduce GDP by the greatest amount?

Accepted Answer

A)   a $20 billion increase in taxes
B)   $20 billion increases in both government spending and taxes
C)   $20 billion decreases in both government spending and taxes
D)   a $20 billion decrease in government spendingE) A) and B)
F) A) and C)

Question 2

-In the economy in the above diagram,international trade:

Accepted Answer

A)   does not occur.
B)   has a contractionary effect on GDP.
C)   has an expansionary effect on GDP.
D)   has no impact on GDP.E) A) and B)
F) B) and C)

Question 3

Other things equal,serious recession in the economies of Canada's trading partners will:

Accepted Answer

A)   have no perceptible impact on the Canadian economy.
B)   cause inflation in the Canadian economy.
C)   depress real output and employment in the Canadian economy.
D)   stimulate real output and employment in the Canadian economy.E) A) and C)
F) C) and D)

Question 4

-Refer to the above diagram for a private closed economy.In this economy investment:

Accepted Answer

A)   decreases as GDP increases.
B)   increases as GDP increases.
C)   is $40 billion at all levels of GDP.
D)   is $60 billion at all levels of GDP.E) All of the above
F) C) and D)

Question 5

The letters Y,C,Ig,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars.
C = 26 + .75Y
Ig = 60
X = 24
M = 10
-Refer to the above information.If the economy's tax schedule was T = 0.2Y rather than T = T0 = 30,the equilibrium GDP would be:

Accepted Answer

A)   $387.3.
B)   $518.5.
C)   $316
D)   $412E) A) and C)
F) A) and B)

Question 6

-Refer to the above diagram for a private closed economy.Unplanned investment in inventories will:

Accepted Answer

A)   occur at all levels of GDP in excess of $200.
B)   occur at all levels of GDP in excess of $600.
C)   occur at all levels of GDP below $600.
D)   not occur because the economy is necessarily in equilibrium.E) A) and B)
F) B) and D)

Question 7

A recessionary expenditure gap in a mixed open economy can be measured as the extent to which aggregate expenditures fall short of those required to achieve the full-employment GDP.

Accepted Answer

A) True 
 B)False

Question 8

Planned investment is $75 billion and saving is $62 billion in a private closed economy.In equilibrium actual investment must be:

Accepted Answer

A)   $13 billion.
B)   $75 billion.
C)   $62 billion.
D)   minus $13 billion.E) None of the above
F) A) and D)

Question 9

For an open mixed economy the equilibrium level of GDP is determined where Sa + Ig + X = T +G.

Accepted Answer

A) True 
 B)False

Question 10

Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged.

Accepted Answer

A) True 
 B)False

Exam 11: The Aggregate Expenditures Model

-In the economy in the above diagram,international trade:

Correct Answer
verified

Planned investment is $75 billion and saving is $62 billion in a private closed economy.In equilibrium actual investment must be:

Correct Answer
verified

-Refer to the above diagram for a private closed economy.In this economy investment:

Correct Answer
verified

A recessionary expenditure gap in a mixed open economy can be measured as the extent to which aggregate expenditures fall short of those required to achieve the full-employment GDP.

Correct Answer
verified

Which of the following would reduce GDP by the greatest amount?

Correct Answer
verified

For an open mixed economy the equilibrium level of GDP is determined where S_a + I_g + X = T +G.

Correct Answer
verified

-Refer to the above diagram for a private closed economy.Unplanned investment in inventories will:

Correct Answer
verified

Other things equal,serious recession in the economies of Canada's trading partners will:

Correct Answer
verified

Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged.

Correct Answer
verified

Correct Answer
verified

Exam 11: The Aggregate Expenditures Model

-In the economy in the above diagram,international trade:

Correct AnswerverifiedShow Answer

Planned investment is $75 billion and saving is $62 billion in a private closed economy.In equilibrium actual investment must be:

Correct AnswerverifiedShow Answer

-Refer to the above diagram for a private closed economy.In this economy investment:

Correct AnswerverifiedShow Answer

A recessionary expenditure gap in a mixed open economy can be measured as the extent to which aggregate expenditures fall short of those required to achieve the full-employment GDP.

Correct AnswerverifiedShow Answer

Which of the following would reduce GDP by the greatest amount?

Correct AnswerverifiedShow Answer

For an open mixed economy the equilibrium level of GDP is determined where Sa + Ig + X = T +G.

Correct AnswerverifiedShow Answer

-Refer to the above diagram for a private closed economy.Unplanned investment in inventories will:

Correct AnswerverifiedShow Answer

Other things equal,serious recession in the economies of Canada's trading partners will:

Correct AnswerverifiedShow Answer

Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

For an open mixed economy the equilibrium level of GDP is determined where S_a + I_g + X = T +G.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified