Economics. Chapter 11.
Economic fluctuations in the very short-run when prices do not change very much.
The economy in the long run, when prices are highly volatile.
Economic fluctuations in the very short-run when prices are highly volatile.
The economy in the long run, when prices are highly stable.
Y*.
Y1.
Y2.
There isn’t sufficient information to answer the question.
Ca.
B.
BY.
Ca + bY.
The graph on the left.
The graph on the right.
Both graphs.
Neither graph.
1 – MPC * (C + I)
(Ca + I)/(1 – MPC)
C + I
Ca + MPC – 1/I
C = I.
S = I.
Y = C
All of the above.
Equal to the corresponding change in output.
Greater than the corresponding change in output.
Less than the corresponding change in output.
Either greater than or less than but not equal to the corresponding change in output.
The graph on the left.
The graph on the right.
Both graphs.
Neither graph.
An increase in government spending will increase total planned expenditures for goods and services.
Cutting taxes will increase the after-tax income of consumers and will also lead to an increase in planned expenditures for goods and services.
Policymakers need to take into account the multipliers for government spending and taxes as they develop their policies.
All of the above.
Collect less taxes and pay out less transfer payments, decreasing consumer spending.
Collect more taxes and pay out less transfer payments, decreasing consumer spending.
Collect less taxes and pay out more transfer payments, increasing consumer spending.
Collect more taxes and pays out more transfer payments, decreasing consumer spending.
Consumers base their decisions on permanent rather than temporary changes in income.
Firms and consumers know that the federal government will often be taking actions to stabilize the economy.
Firms make better forecasts of demand.
All of the above.
Add the marginal propensity to import to the MPC.
Subtract the marginal propensity to import from the MPC.
Multiply the marginal propensity to import by the MPC.
Divide the marginal propensity to import by the MPC.
The graph on the left.
The graph on the right.
Both graphs.
Neither graph.
An upward shift of the planned expenditure function.
A downward shift of the planned expenditure function.
No change in the planned expenditure function.
A lower level of consumption and/or investment spending.
A move from A to B.
A move from A to C.
A move from B to A.
A move from C to A.
An increase in the aggregate price level.
An increase in planned expenditures due to increased stock prices.
An increase in taxes.
A change in the value of the multiplier.
1,170
8,000
3,250
13,000
Lower government purchases by $200 billion.
Raise government purchases by $40 billion.
Lower government purchases by $40 billion.
Raise government purchases by $200 billion.
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