Other Economics Answers

Total spending in the Keynesian model of a closed economy without government includes

Select one:

a. Imports and government spending

b. Consumption and Imports

c. Investment and government spending

d. Consumption and investment

Which one of the following macro-economic variable should be excluded in a Keynesian model of a closed economy without government

Select one:

a. Savings

b. Government spending

c. Investment

d. Induced consumption

Which one of the following is true for a Keynesian model in a closed economy without government

Select one:

a. Investment equals savings

b. Consumption equals investment

c. Savings equals interest rate

d. Consumption equals to saving

Given the consumption function below C = α + βY, if β is 0.4, how can it be interpreted?

Select one:

a. Out of any additional income, Consumption increases by 4%

b. Out of any additional income, consumption increases by 40%

c. Out of any additional income, Consumption increases by 0.4%

d. Out of any additional income, Consumption increases by 60%

One of the following is not assumption of the Keynesians explanation for income determination in a closed economy without government

Select one:

a. Autonomous consumption is not income inelastic

b. Government spending is exogenously determined

c. None of options are correct

d. Induced consumption is not related to the level of income

What happens when the minimum wage increases, in the short run?

Select one:

a. Aggregate demand shifts right, the price level rises, and real output rises

b. Aggregate supply shifts down, the price level falls, and real output increases

c. Aggregate demand shifts left, the price level falls, and real output falls

d. Aggregate supply shifts up, the price level rises, and real output decreases

If foreign income decreases and the domestic economy is at potential output, then domestic aggregate demand will __________ in the short run and domestic aggregate supply will __________ in the long run.

Select one:

a. Decrease not change

b. Increase, not change

c. Increase, increase

d. Decrease, decrease

A (n) __________ exists when aggregate demand is less than potential output.

Select one:

a. inflationary gap

b. long-run equilibrium

c. short-run equilibrium

d. recessionary gap

In the AS/AD model, an expansionary monetary policy---------.

Select one:

a. reduces aggregate demand by reducing interest rates

b. reduces aggregate demand by raising interest rates

c. increases aggregate demand by raising interest rates

d. increases aggregate demand by reducing interest rates

Which of the following statements are correct?

a. If the marginal propensity to consume increases, the equilibrium level of income will increase.

b. In an open economy with a government sector the sum of the marginal propensity to consume and the marginal propensity to save is always equal to 1.

c. If the tax rate decreases, the aggregate spending curve will shift parallel upwards.

Select one:

A. b

B. b and c

C. a and b

D. a and c