Macroeconomics Answers

Suppose the sanctions are imposed on South African economy decreased the marginal propensity to import, how will the size of the multiplier be affected?

a. 

It will stay the same.

a. It will stay the same.

b. 

It will increase.

b. It will increase.

c. 

It will decrease.

1.Which one of the following statements is correct?

a. a decrease in net exports will decrease the equilibrium level of income

b. an increase in the tax rate will increase the size of the multiplier

c. a change in the tax rate has no impact on the size of the multiplier

d. an increase in net exports will decrease the equilibrium level of income

2.Which one of the following statements is correct regarding the Keynesian model with the government sector and the foreign sector?

a. government expenditure is autonomous

b. exports and imports are a function of the interest rate

c. an increase in government expenditure will decrease the equilibrium level of income

d. a decrease in net exports will increase the equilibrium level of income

In the Keynesian model, tax revenue…

a. does not appear in the aggregate expenditure function because it is always equal to government expenditure.

b. is taken into account through its effect on consumption.

c. reduces equilibrium income because it reduces autonomous spending.

d. increases aggregate expenditure because government invariably increases its spending when taxes rise.

e. is taken to be fixed because government expenditure is taken to be fixed.

In a Keynesian model with a foreign sector, an increase in the domestic income level will_____.

a. increase both exports and imports.

b. increase exports and decrease imports.

c. leave exports unchanged and increase imports.

d. decrease both exports and imports.

In the full Keynesian model,a decrease in exports would result in what?