Question 1

If autonomous consumption rises,the TE curve shifts __________,the marginal propensity to consume __________,and the TP curve __________.

Accepted Answer

A)   upward; rises; shifts downward
B)   upward; remains unchanged; remains unchanged
C)   downward; rises; remains unchanged
D)   upward; remains unchanged; shifts downward
E)   none of the above

Question 2

If households purchase $60,000 worth of consumer goods and firms produce $50,000 worth of consumer goods,then

Accepted Answer

A)   inventory changes are -$10,000.
B)   inventory changes are +$10,000.
C)   new capital goods expenditures (by firms) are $10,000.
D)   consumer goods expenditures are $10,000.

Question 3

-Refer to Exhibit 10-2.If autonomous investment decreases,the TE curve will shift ____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.

Accepted Answer

A)   downward; greater
B)   downward; less
C)   upward; less
D)   upward; greater

Question 4

Keynes asserted that the interest rate is important in determining investment,but not as important as other variables.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is consistent with Keynes's view of Say's law?

Accepted Answer

A)   Saving increases by $3 billion,consumption falls by $3 billion,and investment rises by $3 billion.
B)   Consumption rises by $3 billion and saving rises by more than $3 billion.
C)   Saving rises by $3 billion,consumption falls by $3 billion,and investment rises by something less than $3 billion.
D)   Saving rises by $3 billion,consumption falls by $3 billion,and investment rises by $6 billion.
E)   none of the above

Question 6

John Maynard Keynes believed that wages may be inflexible in the downward direction.Consequently,an economy

Accepted Answer

A)   could get stuck in long-run equilibrium.
B)   could get stuck in a recessionary gap.
C)   could get stuck in an inflationary gap.
D)   would always produce more than Natural Real GDP.
E)   b and c

Question 7

Which of the following statements is false?

Accepted Answer

A)   Keynes believed that the level of investment depends on more than just the interest rate.
B)   Saving is the difference between disposable income and consumption.
C)   Keynes believed that saving is more responsive to changes in income than to changes in the interest rate.
D)   According to Keynes,wage rates may fall too quickly when the economy is in a recessionary gap.

Question 8

2,there is a tendency for Real GDP to A)  rise. B)  fall. C)  remain unchanged. D)  There is not enough information to answer this question." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 10-1.At Q2,there is a tendency for Real GDP to

Accepted Answer

A)   rise.
B)   fall.
C)   remain unchanged.
D)   There is not enough information to answer this question.

Question 9

-Refer to Exhibit 10-2.Which of the following is correct about point M?

Accepted Answer

A)   TE is $4,500 billion and TP is only $1,500 billion.
B)   TP is $4,500 billion and TE is only $1,500 billion.
C)   TE is $7,500 and TP is only $5,500 billion.
D)   TP is only $7,500 billion and TE is only $5,500 billion.
E)   TE is $3,000 billion and TP is only $1,500 billion.

Question 10

When the MPC = 0.75,the multiplier is

Accepted Answer

A)   0.25.
B)   1.33.
C)   2.50.
D)   4.00.
E)   5.00.

Question 11

When the MPC = 0.6,the multiplier is

Accepted Answer

A)   0.40.
B)   2.50.
C)   1.67.
D)   6.00.

Question 12

Government purchases rise by $100 billion and the MPC equals 0.75.Assuming that idle resources exist at each expenditure round,and the multiplier is operative,the change in Real GDP equals

Accepted Answer

A)   $40 billion.
B)   $75 billion.
C)   $400 billion.
D)   $750 billion.
E)   $250 billion.

Question 13

o) is equal to A)  $4. B)  $40. C)  $400. D)  $4,000. E)  $2,000." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 10-8.Autonomous consumption (Co) is equal to

Accepted Answer

A)   $4.
B)   $40.
C)   $400.
D)   $4,000.
E)   $2,000.

Question 14

The consumption function is a function showing the relationship between consumption and

Accepted Answer

A)   disposable income.
B)   exports.
C)   interest rates.
D)   investment.

Question 15

In the simple Keynesian model,a rightward shift in the aggregate demand curve __________ result in a change in the price level when the economy is in the horizontal segment of the AS curve and ___________ result in a change in the price level if the economy is in the vertical segment of the AS curve.

Accepted Answer

A)   will not; will
B)   will not; will not
C)   will; will not
D)   will; will

Question 16

-Refer to Exhibit 10-8.When disposable income equals $1,500,saving equals

Accepted Answer

A)   $1,800.
B)   $1,600.
C)   $100.
D)   -$100.

Question 17

According to Keynes,the private sector (by itself)

Accepted Answer

A)   can always move the economy out of a recessionary gap in a timely manner.
B)   cannot always move the economy out of a recessionary gap in a timely manner.
C)   can never move the economy out of a recessionary gap.
D)   can only move the economy out of a recessionary gap if the SRAS curve drops.
E)   can only move the economy out of a recessionary gap if the SRAS curve rises.

Question 18

Describe Keynes' criticism of Say's law in a money economy.

Accepted Answer

In order for Say's law to hold in a mone...

Question 19

-Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift ____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.

Accepted Answer

A)   downward; greater
B)   downward; less
C)   upward; less
D)   upward; greater

Question 20

0A. B)  C0A divided by AF. C)  AF divided by C0F. D)  C0F divided by AF. E)  none of the above" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 10-4.Marginal propensity to consume is equal to

Accepted Answer

A)   AF divided by C0A.
B)   C0A divided by AF.
C)   AF divided by C0F.
D)   C0F divided by AF.
E)   none of the above

Exam 10: Monopoly

When the MPC = 0.75,the multiplier is

Correct AnswerverifiedShow Answer

-Refer to Exhibit 10-8.When disposable income equals $1,500,saving equals

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Keynes asserted that the interest rate is important in determining investment,but not as important as other variables.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

-Refer to Exhibit 10-1.At Q2,there is a tendency for Real GDP to

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-Refer to Exhibit 10-8.Autonomous consumption (Co) is equal to

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Which of the following is consistent with Keynes's view of Say's law?

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Which of the following statements is false?

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When the MPC = 0.6,the multiplier is

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-Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift ____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.

Correct AnswerverifiedShow Answer

John Maynard Keynes believed that wages may be inflexible in the downward direction.Consequently,an economy

Correct AnswerverifiedShow Answer

Government purchases rise by $100 billion and the MPC equals 0.75.Assuming that idle resources exist at each expenditure round,and the multiplier is operative,the change in Real GDP equals

Correct AnswerverifiedShow Answer

If autonomous consumption rises,the TE curve shifts __________,the marginal propensity to consume __________,and the TP curve __________.

Correct AnswerverifiedShow Answer

The consumption function is a function showing the relationship between consumption and

Correct AnswerverifiedShow Answer

-Refer to Exhibit 10-2.If autonomous investment decreases,the TE curve will shift ____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.

Correct AnswerverifiedShow Answer

Describe Keynes' criticism of Say's law in a money economy.

Correct AnswerverifiedIn order for Say's law to hold in a mone...View AnswerShow Answer

-Refer to Exhibit 10-4.Marginal propensity to consume is equal to

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-Refer to Exhibit 10-2.Which of the following is correct about point M?

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If households purchase $60,000 worth of consumer goods and firms produce $50,000 worth of consumer goods,then

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According to Keynes,the private sector (by itself)

Correct AnswerverifiedShow Answer

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-Refer to Exhibit 10-1.At Q₂,there is a tendency for Real GDP to

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-Refer to Exhibit 10-8.Autonomous consumption (C_o) is equal to

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-Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift __ and the new level of equilibrium Real GDP will be _ than $4,500.

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If autonomous consumption rises,the TE curve shifts ,the marginal propensity to consume ,and the TP curve __.

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-Refer to Exhibit 10-2.If autonomous investment decreases,the TE curve will shift __ and the new level of equilibrium Real GDP will be _ than $4,500.

Correct Answer
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In order for Say's law to hold in a mone...
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