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10 Aggregate CHAPTER Expenditures: The Multiplier, Net Exports, and Government Topic 1. 2. 3. 4. 5. 6. Multiplier, changes in GDP Open economy Mixed economy Balanced-budget multiplier Recessionary and inflationary gaps Applications and critiques Last Word True-False Question numbers 1-54 55-84 85-151 152-164 165-190 191-199 200-201 202-217 ___________________________________________________________________________________________________ ___________________________________________________________________________________________________ Multiple Choice Questions Multiplier, changes in GDP 1. The multiplier effect means that: A) consumption is typically several times as large as saving. B) a small change in consumption can cause a much larger increase in investment. C) a small increase in investment can cause GDP to change by a larger amount. D) a small decline in the MPC can cause equilibrium GDP to rise by several times that amount. 2. The multiplier is: A) 1/MPC. B) 1/(1 + MPC). C) 1/MPS. D) 1/(1 - MPS). 3. The multiplier is useful in determining the: A) full-employment unemployment rate. B) level of business inventories. C) rate of inflation. D) change in equilibrium GDP resulting from a change in spending. 4. The multiplier is defined as: A) 1 - MPS. Page 1 B) change in GDP initial change in spending. C) change in GDP/initial change in spending. D) change in GDP - initial change in spending. Use the following to answer questions 5-6: 5. The above figure shows the saving schedules for economies 1, 2, 3, and 4. Which economy has the highest marginal propensity to consume? A) 1 B) 2 C) 3 D) 4 6. The above figure shows the saving schedules for economies 1, 2, 3, and 4. Which economy has the largest multiplier? A) 1 B) 2 C) 3 D) 4 7. If 100 percent of any change in income is spent, the multiplier will be: A) equal to the MPC. B) 1. C) zero. D) infinitely large. 8. The multiplier can be calculated as: A) 1/(MPS + MPC) B) MPC/MPS C) 1/(1 - MPC) D) 1 - MPC = MPS 9. The multiplier: A) occurs only in response to a change in the level of investment spending. B) can be found by taking the reciprocal of the MPS. Page 2 C) occurs only when intended investment increases as GDP increases. D) is measured by the slope of the saving schedule. 10. The size of the multiplier is equal to the: A) slope of the consumption schedule. B) reciprocal of the slope of the consumption schedule. C) slope of the saving schedule. D) reciprocal of the slope of the saving schedule. 11. If the MPS is only half as large as the MPC, the multiplier is: A) 2. B) 3. C) 4. D) 5. 12. The complex multiplier is: A) larger than the simple multiplier because the latter embodies fewer leakages. B) larger than the simple multiplier because the latter embodies more leakages. C) smaller than the simple multiplier because the latter embodies fewer leakages. D) smaller than the simple multiplier because the latter embodies more leakages. 13. If the MPC is .70 and gross investment increases by $3 billion, the equilibrium GDP will: A) increase by $10 billion. B) increase by $2.10 billion. C) decrease by $4.29 billion. D) increase by $4.29 billion. 14. The numerical value of the multiplier will be smaller the: A) larger the average propensity to consume. B) larger the slope of the saving schedule. C) larger the slope of the consumption schedule. D) smaller the slope of the saving schedule. 15. The practical significance of the multiplier is that it: A) brings about an equality of planned investment and saving. B) magnifies relatively small initial changes in spending into larger changes in GDP. C) keeps inflation within tolerable limits. D) helps to stabilize the economy. 16. The multiplier: A) varies directly with the slope of the investment-demand schedule. B) is unrelated to the slope of the saving schedule. C) will be greater, the smaller the slope of the saving schedule. D) will be greater, the steeper the slope of the saving schedule. 17. The increase in income that results from an increase in investment spending would be greater the: Page 3 A) B) C) D) smaller the MPS. smaller the APC. larger the MPS. smaller the MPC. 18. The multiplier effect: A) reduces the MPC. B) magnifies small changes in spending into larger changes in output and income. C) promotes stability of the general price level. D) lessens upswings and downswings in business activity. 19. If the MPC is .6, the multiplier will be: A) 4.0. B) 6.0. C) 2.5. D) 1.67. 20. Assume the MPC is 2/3. If investment spending increases by $2 billion, the level of GDP will increase by: A) $3 billion. B) $2/3 billion. C) $6 billion. D) $2 billion. 21. The multiplier is: A) 1/APS. B) 1/APC. C) 1/MPC. D) 1/MPS. 22. The multiplier applies: A) only when an inflationary gap exists. B) to shifts in the consumption and investment schedules. C) only to shifts in the investment schedule. D) only to shifts in the consumption schedule. 23. The multiplier effect indicates that: A) a decline in the interest rate will cause a proportionately larger increase in investment. B) a change in aggregate expenditures will change aggregate income by a larger amount. C) a change in aggregate expenditures will increase aggregate income by the same amount. D) a small increase in total income will generate a large change in aggregate expenditures. Use the following to answer questions 24-29: Answer the next question(s) on the basis of the following table that illustrates the multiplier process in a private closed economy: Page 4 Change in income Assumed increase in investment Second round All other rounds Totals $20 $_____ $_____ $_____ Change in consumption $_____ $12.80 $36.00 $_____ Change in saving $4 $_____ $_____ $20 24. Refer to the above table. The marginal propensity to consume is: A) .5. B) .75. C) .8. D) .9. 25. Refer to the above table. The marginal propensity to save is: A) .5. B) .25. C) .2. D) .1. 26. Refer to the above table. The change in income in round two will be: A) $4. B) $16. C) $20. D) $24. 27. Refer to the above table. The total change in income resulting from the initial change in investment will be: A) $100. B) $20. C) $80. D) $200. 28. Refer to the above table. The total change in consumption resulting from the initial change in investment will be: A) $100. B) $96. C) $180. D) $80. 29. Refer to the above table. The multiplier in this economy is: A) 2. B) 4. C) 5. D) 10. 30. If a $200 billion increase in investment spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the multiplier in the economy is: Page 5 A) B) C) D) 4. 5. 3.33. 2.5. 31. If a $50 billion decrease in investment spending causes income to decline by $50 billion in the first round of the multiplier process and by $25 in the second round, the multiplier in the economy is: A) 2. B) 3.33. C) 5. D) 10. 32. If a $100 billion decrease in investment spending causes income to decline by $100 billion in the first round of the multiplier process and by $75 billion in the second round, income will eventually decline by: A) $200 billion. B) $300 billion. C) $400 billion. D) $500 billion. 33. If a $500 billion increase in investment spending increases income by $500 billion in the first round of the multiplier process and by $450 in the second round, income will eventually increase by: A) $2500 billion. B) $3000 billion. C) $4000 billion. D) $5000 billion. 34. If the marginal propensity to save is 0.2 in a private closed economy, a $20 billion rise in investment spending will increase: A) GDP by $120 billion. B) GDP by $20 billion. C) saving by $25 billion. D) consumption by $80 billion. 35. The Council of Economic Advisers has estimated that the complex multiplier is approximately: A) 4. B) 3.5. C) 3. D) 2. 36. A $1 billion increase in investment will cause a: A) (1/MPS) billion increase in equilibrium GDP. B) (MPS) billion increase in equilibrium GDP. C) (1 - MPC) billion increase in equilibrium GDP. D) (MPC - MPS) billion increase in equilibrium GDP. 37. In a private closed economy (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of income? Page 6 A) B) C) D) $280 billion $320 billion $262 billion $198 billion 38. If the marginal propensity to consume is 0.9 in a private closed economy, a $20 billion decline in investment spending will decrease: A) GDP by $20 billion. B) GDP by $100 billion. C) saving by $20. D) consumption by $200 billion. 39. Suppose that the level of GDP increased by $100 billion in an economy where the marginal propensity to consume is 0.5. Aggregate expenditures must have increased by: A) $100 billion. B) $50 billion. C) $500 billion. D) $5 billion. Use the following to answer questions 40-42: C1 C2 Consumption C3 C4 Disposable income 40. Refer to the consumption schedules shown in the above diagram for economies 1, 2, 3, and 4. The MPC is greatest in economy: A) 1. B) 2. C) 3. D) 4. 41. Refer to the consumption schedules shown in the above diagram for economies 1, 2, 3, and 4. The APC at any given level of output is greatest in economy: A) 1. B) 2. Page 7 C) 3. D) 4. 42. Refer to the consumption schedules shown in the above diagram for economies 1, 2, 3, and 4. Other things equal, which economy embodies the greatest degree of macroeconomic stability? A) 1 B) 2 C) 3 D) 4 43. (Advanced analysis) Assume the consumption schedule for a private closed economy is C = 40 + 0.75Y , where C is consumption and Y is gross domestic product. The multiplier for this economy: A) is 3. B) is 4. C) is 5. D) cannot be determined from the information given. 44. (Advanced analysis) Assume the saving schedule for a private closed economy is S = -20 + 0.2Y , where S is saving and Y is gross domestic product. The multiplier for this economy: A) is 3. B) is 4. C) is 5. D) cannot be determined from the information given. Use the following to answer questions 45-48: Answer the next question(s) below on the basis of the following information for a private closed economy: Gross domestic product $100 200 300 400 500 Consumption $120 180 240 300 360 Expected rate of return 25% 20 15 10 5 Amount of investment $ 0 20 40 60 80 45. Refer to the above information. If the real interest rate is 20 percent, the equilibrium level of GDP will be: A) $100. B) $200. C) $300. D) $400. 46. Refer to the above information. If the real interest rate is 10 percent, the equilibrium level of GDP will be: A) $100. B) $200. C) $300. D) $400. Page 8 47. Refer to the above information. Your answers to the two previous questions suggest that: A) the interest rate and the equilibrium level of GDP are directly related. B) the interest rate and the equilibrium level of GDP are inversely related. C) the interest rate and the equilibrium level of GDP are unrelated. D) as the interest rate falls, the level of investment also falls. 48. Refer to the above information. The multiplier for this economy: A) is 2. B) is 2.5. C) is 3. D) is 4. Use the following to answer questions 49-51: Answer the next question(s) on the basis of the following information for a private closed economy: Expected rate of return 15% 12 9 6 3 0 Investment 0 40 80 120 160 200 GDP $100 200 300 400 500 600 Consumption $100 160 220 280 340 400 49. Refer to the above information. If the real interest rate is 9 percent, the equilibrium level of GDP will be: A) $600. B) $500. C) $400. D) $300. 50. Refer to the above information. In this economy a 3 percentage point decrease in the interest rate will: A) increase equilibrium GDP by $200. B) increase equilibrium GDP by $50. C) increase equilibrium GDP by $100. D) decrease equilibrium GDP by $50. 51. Refer to the above information. The multiplier in this economy is: A) 4. B) 5. C) 2.5. D) 3.5. Use the following to answer questions 52-54: Page 9 52. Refer to the above diagram for a private closed economy. The marginal propensity to consume is: A) GF/GB. B) DA/GB. C) FE/DE. D) FB/0B. 53. Refer to the above diagram for a private closed economy. The upshift of the aggregate expenditures schedule from (C + Ig)1 to (C + Ig) 2 reflects: A) an increase in investment expenditures. B) a decrease in consumption expenditures. C) an increase in the MPC. D) an increase in the APS. 54. Refer to the above diagram for a private closed economy. The multiplier is: A) GF/DE. B) GF/GB. C) FE/GF. D) AB/GF. Open economy 55. Page 10 The above diagram shows saving schedules for economies A and B. We can say that: A) the MPS is greater in B than in A. B) other things equal, economy A is more stable than economy B. C) other things equal, economy B is more stable than economy A. D) the MPC is less in B than in A. 56. Inports have the same effect on the current size of GDP as: A) exports. B) investment. C) consumption. D) saving. 57. Exports have the same effect on the current size of GDP as: A) imports. B) investment. C) taxes. D) saving. 58. At the equilibrium GDP for an open economy: A) net exports may be either positive or negative. B) imports will always exceed exports. C) exports will always exceed imports. D) exports and imports will be equal. 59. Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of U.S. GDP: A) unemployment will decrease domestically. B) U.S. GDP will fall. C) inflation will occur domestically. D) U.S. real GDP will rise. Use the following to answer questions 60-61: Complete the following table and answer the next question(s) on the basis of the resulting data. All figures are in billions of dollars. Page 11 Domestic output (GDP = PI) $ 200 250 300 350 400 450 500 Aggregate expenditures, closed economy $ 230 270 310 350 390 430 470 Exports $ 30 30 30 30 30 30 30 Imports $ 20 20 20 20 20 20 20 Net exports $____ ____ ____ ____ ____ ____ ____ Aggregate expenditures, open economy $____ ____ ____ ____ ____ ____ ____ 60. If the above economy was closed to international trade, the equilibrium GDP and the multiplier would be: A) $300 and 5. B) $350 and 4. C) $400 and 4. D) $350 and 5. 61. Refer to the above table. For the open economy the equilibrium GDP and the multiplier will be: A) $300 and 2.5. B) $450 and 5. C) $400 and 4. D) $400 and 5. 62. If net exports decline from zero to some negative amount, the aggregate expenditures schedule would: A) shift upward. B) shift downward. C) not move (net exports do not affect aggregate expenditures). D) become steeper. 63. If net exports are positive: A) the equilibrium GDP must be greater than the full-employment GDP. B) imports must exceed exports. C) aggregate expenditures are greater at each level of GDP than when net exports are zero or negative. D) some other component of aggregate expenditures must be negative. 64. An upward shift of the aggregate expenditures schedule might be caused by: A) a decrease in exports, with no change in imports. B) a decrease in imports, with no change in exports. C) an increase in exports, with an equal decrease in investment spending. D) an increase in imports, with no change in exports. 65. Other things equal, an increase in an economy's exports will: A) lower the marginal propensity to import. B) have no effect on domestic GDP because imports will change by an offsetting amount. C) decrease its domestic aggregate expenditures and therefore decrease its equilibrium GDP. D) increase its domestic aggregate expenditures and therefore increase its equilibrium GDP. Page 12 66. If the dollar appreciates relative to foreign currencies, we would expect: A) the multiplier to decrease. B) a country's exports and imports to both fall. C) a country's net exports to rise. D) a country's net exports to fall. 67. If a nation imposes tariffs and quotas on foreign products, the immediate effect will be to: A) reduce the rate of domestic inflation. B) increase efficiency in the world economy. C) increase domestic output and employment. D) reduce domestic output and employment. 68. If the multiplier in an economy is 5, a $20 billion increase in net exports will: A) increase GDP by $100 billion. B) reduce GDP by $20 billion. C) decrease GDP by $100 billion. D) increase GDP by $20 billion. Use the following to answer questions 69-72: (Advanced analysis) Answer the next question(s) on the basis of the following information for a private open economy: C = 40 + .8Y _ Ig = Ig = 40 _ X = X = 20 _ M = M = 30 69. The equilibrium level of GDP (=Y ) in the above economy is: A) $200. B) $245. C) $320. D) $350. 70. Refer to the above information. In equilibrium the level of saving is: A) $20. B) $30. C) $40. D) $50. 71. Refer to the above information. This nation is incurring: A) a trade surplus. B) balance in its international trade. C) a trade deficit. D) unemployment. Page 13 72. Refer to the above information. International trade: A) has an expansionary effect on GDP. B) has a contractionary effect on GDP. C) has no effect on GDP. D) is causing inflation in this economy. 73. If the equilibrium level of GDP in a private open economy is $1000 billion and consumption is $700 billion at that level of GDP, then: A) saving must be $300 billion. B) net exports must be $300 billion. C) S + C must equal $300 billion. D) Ig+ Xn must equal $300 billion. 74. An exchange rate: A) is the ratio of the dollar volume of a nation's exports to the dollar volume of its imports. B) measures the interest rate ratios of any two nations. C) is the amount that one nation must export to obtain $1 worth of imports. D) is the price at that the currencies of any two nations exchange for one another. 75. If the United States wants to increase its net exports, it might take steps to: A) increase its GDP. B) reduce existing tariffs and import quotas. C) decrease the dollar price of foreign currencies. D) increase the dollar price of foreign currencies. 76. Other things equal, serious recession in the economies of U.S. trading partners will: A) have no perceptible impact on the U.S. economy. B) cause inflation in the U.S. economy. C) depress real output and employment in the U.S. economy. D) stimulate real output and employment in the U.S. economy. Use the following to answer questions 77-82: Page 14 77. Refer to the above diagram. If (C + Ig) are the private expenditures in the closed economy and Xn2 are the net exports in the open economy: A) exports are negative. B) net exports are positive. C) net exports are negative. D) exports are positive. 78. Refer to the above diagram. If net exports are Xn2, the GDP in the open economy will exceed GDP in the closed economy by: A) AB. B) AD. C) FG. D) BD. 79. Refer to the above diagram. The multiplier in this economy is: A) 0E/0A. B) BD/FG. C) FG/BD. D) BD/AD. 80. Refer to the above diagram. If aggregate expenditures in this economy are (C + I g + Xn 2), then the equilibrium levels of GDP and aggregate expenditures respectively will be: A) 0A and 0E. B) 0B and 0F. C) 0A and AH . D) 0D and DJ . 81. Refer to the above diagram. The change in aggregate expenditures as shown from (C + Ig + Xn2) to (C + Ig + Xn 1) might be caused by: A) an appreciation of this nation's currency relative to the currencies of its trading partners. B) a depreciation of this nation's currency relative to the currencies of its trading partners. C) a decrease in this nation's price level relative to price levels abroad. D) a rightward shift in this nation's 45-degree line. 82. Refer to the above diagram. The change in aggregate expenditures as shown from (C + Ig + Xn1) to (C + Ig + Xn 2) will produce: A) a decrease in real GDP. B) an inflationary gap if 0D is this nation's full-employment level of GDP. C) an increase in real GDP if 0B is this nation's full-employment level of GDP. D) an inflationary gap if 0B is this nation's full-employment level of GDP. Use the following to answer questions 83-84: (Advanced analysis) Answer the next question(s) on the basis of the following information for a private open economy. The letters Y , C, Ig, X , and M stand for GDP, consumption, gross investment, exports, and imports respectively. Figures are in billions of dollars. Page 15 C = 26 + .75Y Ig = 60 X = 24 M = 10 83. The equilibrium level of GDP for the above open economy is: A) $390. B) $375. C) $320. D) $400. 84. The multiplier for the above economy is: A) 4.60. B) 3.33. C) 5.00. D) 4.00. Mixed economy 85. In a mixed open economy the equilibrium level of GDP exists where: A) Ca + Ig + Xn intersects the 45-degree line. B) Ca + Ig = Sa + T + X . C) Ca + Ig + Xn + G = GDP. D) Ca + Ig + Xn = Sa + T . 86. In a mixed open economy the equilibrium level of GDP is determined at that point where: A) Sa + M + T = Ig + X + G. B) the 45-degree line and the saving schedule intersect. C) Sa + X + G = Ig + T . D) Sa + Ig + X = G + T . 87. Suppose that a mixed open economy is producing at its equilibrium level of income and that net exports are zero. If at the equilibrium income level the public sector's budget shows a surplus: A) Ca + Ig + Xn + G must exceed GDP. B) planned investment must exceed saving. C) a recessionary gap must exist. D) saving must exceed planned investment. 88. Other things equal, if $100 billion of government purchases (G) is added to private spending (C + Ig + Xn), GDP will: A) increase by $100 billion. B) increase by less than $100 billion. C) increase by more than $100 billion. D) fall by $100 billion Page 16 89. Suppose the economy's multiplier is 2. Other things equal, a $25 billion decrease in government expenditures on national defense will cause equilibrium GDP to: A) decrease by $50 billion. B) decrease by $150 billion. C) remain unchanged since spending on military goods is unproductive and usually wasteful. D) decrease by $25 billion. 90. Assume the MPC is .8. If government were to impose $50 billion of new taxes on household income, consumption spending would decrease by: A) $100 billion. B) $90 billion. C) $40 billion D) $50 billion. Use the following to answer questions 91-93: 91. Refer to the above diagram. The level of government spending: A) is equal to tax collections at each level of GDP. B) is the same at all levels of GDP. C) varies inversely with the level of GDP. D) varies directly with the level of GDP. 92. Refer to the above diagram. The sizes of the multipliers associated with changes in investment and government spending in this economy are: A) 2.5 and 1.5 respectively. B) 3 and 2 respectively. C) both 2.5. D) 2 and 3 respectively. 93. Refer to the above diagram. The impact of the public sector on the equilibrium GDP: A) is expansionary. B) is contractionary. C) is neutral. D) cannot be determined from the information given. Page 17 94. Other things equal, the multiplier effect associated with a change in government spending is: A) the same as that associated with a change in taxes. B) equal to that associated with a change in investment or consumption. C) less than that associated with a change in investment. D) greater than that associated with a change in investment. 95. In which of the following situations for a mixed open economy will the level of GDP expand? A) when Ig + X + G exceeds Sa + M + T B) when Sa + T + M exceeds Ig + G + X C) when GDP exceeds Ca + Ig + G + Xn D) when Ig + M + T exceeds Ca + X + S 96. If a lump-sum income tax of $25 billion is levied and the MPS is 0.20, the: A) saving schedule will shift upward by $5 billion. B) consumption schedule will shift downward by $25 billion. C) consumption schedule will shift downward by $20 billion. D) consumption schedule will shift upward by $25 billion. 97. Which of the following statements is incorrect? A) Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium GDP by more than would a $15 billion increase in taxes. B) Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is 0.4. C) If the MPC is 0.8 and GDP has declined by $40 billion, this was caused by a decline in aggregate expenditures of $8 billion. D) A government surplus is anti-inflationary; a government deficit is expansionary. 98. Suppose the economy is operating at its full-employment-noninflationary GDP and the MPC is 0.75. The Federal government now finds that it must increase spending on military goods by $21 billion in response to a deterioration in the international political situation. To sustain full-employment-noninflationary GDP government must: A) reduce taxes by $28 billion. B) reduce transfer payments by $21 billion. C) increase taxes by $21 billion. D) increase taxes by $28 billion. 99. A $1 increase in government spending on goods and services will have a greater impact on the equilibrium GDP than will a $1 decline in taxes because: A) government spending is more employment-intensive than is either consumption or investment spending. B) government spending increases the money supply and a tax reduction does not. C) a portion of a tax cut will be saved. D) taxes vary directly with income. 100. The multiplier associated with a change in government purchases is: A) always equal to 1. B) smaller than that associated with an equal change in taxes. C) the same as that associated with a change in investment. Page 18 D) less than that associated with a change in investment. E) greater than that associated with a change in investment. 101. In a mixed open economy, where aggregate expenditures exceed GDP: A) Ig + X + G = Ca. B) Ca + Ig + Xn + G < domestic output. C) Ig > S . D) Ig + X + G > Sa + M + T . 102. Ignoring international trade, in a mixed economy aggregate expenditures are comprised of: A) Ca + S + G. B) Ca + Ig + G. C) Ca + S + Ig. D) Ca + T + Ig. 103. An increase in taxes of a specific amount will have a smaller impact on the equilibrium GDP than will a decline in government spending of the same amount because: A) the MPC is smaller in the private sector than it is in the public sector. B) declines in government spending always tend to stimulate private investment. C) disposable income will fall by some amount smaller than the tax increase. D) some of the tax increase will be paid out of income that would otherwise have been saved. 104. If APC = .6 and MPC = .7, the immediate impact of an increase in personal taxes of $20 will be to: A) have no effect on consumption. B) decrease consumption by $14. C) decrease consumption by $12. D) increase consumption by $14. Use the following to answer questions 105-108: The following schedule contains data for a private closed economy. All figures are in billions. Use these data in answering the next question(s). GDP $140 180 220 260 300 C $150 180 210 240 270 105. Refer to the above data. If gross investment is $10 at all levels of GDP, the equilibrium GDP will be: A) $300. B) $260. C) $220. D) $180. Page 19 106. Refer to the above data. If a lump-sum tax of $20 is imposed, the consumption schedule will become: (a) GDP $120 160 200 240 280 C $150 180 210 240 270 GDP $140 180 220 260 300 (b) C $155 185 215 245 275 GDP $140 180 220 260 300 (c) C $135 165 195 225 255 GDP $140 180 220 260 300 (d) C $130 160 190 220 250 107. Refer to the above data. If gross investment remains at $10 at all levels of GDP, the after-tax equilibrium level of GDP will be: A) $220. B) $190. C) $180. D) $160. 108. Refer to the above data. Given the levels of investment and taxes already specified, the addition of governmental expenditures of $10 at each level of GDP will result in an equilibrium GDP of: A) $235. B) $220. C) $200. D) $180. 109. Which of the following is a correct statement of the impacts of a lump-sum tax? A) Disposable income will increase by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC. B) Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the multiplier. C) Disposable income will decline by the amount of the tax and consumption at each level of GDP will also decline by the amount of the tax. D) Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC. 110. When the public sector is added to the aggregate expenditures model: A) the equilibrium condition becomes G + S = T + Ig + X . B) the equilibrium condition becomes G T + = S + Ig + X . C) the equilibrium condition becomes Ca + Ig + Xn + G + T = GDP. D) we add a new leakage in the form of taxes and a new injection in the form of government spending. 111. The level of aggregate expenditures in a mixed open economy is comprised of: A) Ca + Ig + Xn B) Ca + Ig + G + T + Xn . C) Ca + Ig + Xn + G. D) Ca + G. 112. If the MPC is 2/3, the initial impact of an increase of $12 billion in lump-sum taxes will be to cause: Page 20 A) B) C) D) a rightward shift in the investment-demand schedule. an $8 billion downshift in the consumption schedule. a $4 billion upshift in the consumption schedule. a $12 billion downshift in the consumption schedule. 113. In a mixed closed economy: A) government purchases and saving are injections, while investment and taxes are leakages. B) taxes and government purchases are leakages, while investment and saving are injections. C) taxes and savings are leakages, while investment and government purchases are injections. D) taxes and investment are injections, while saving and government purchases are leakages. 114. An increase in taxes will have a greater effect on the equilibrium GDP: A) if the tax revenues are redistributed through transfer payments. B) the larger the MPS. C) the smaller the MPC. D) the larger the MPC. 115. A lump-sum tax causes the after-tax consumption schedule: A) and the before-tax consumption schedule to coincide. B) to be steeper than the before-tax consumption schedule. C) to be flatter than the before-tax consumption schedule. D) to be parallel to the before-tax consumption schedule. Use the following to answer questions 116-119: (Advanced analysis) Answer the next question(s) on the basis of the following information for a mixed open economy. The letters Y , Ca, Ig, Xn, G , and T stand for GDP, consumption, gross investment, net exports, government purchases, and net taxes respectively. Figures are in billions of dollars. Ca = 25 + .75(Y - T ) Ig = Ig0 = 50 Xn = Xn0 = 10 G = G0 = 70 T = T0 = 30 116. Refer to the above information. The equilibrium level of GDP for this economy is: A) $600. B) $530. C) $415. D) $400. 117. Refer to the above information. The multiplier for this economy is: A) 4. B) 3. C) 2. D) 2.33. Page 21 118. Refer to the above information. If government desired to raise the equilibrium GDP to $650, it could: A) raise G by $45 and reduce T by $10. B) raise G by $40 and reduce T by $30. C) raise G by $30 or reduce T by $40. D) raise both G and T by $40. 119. 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: A) $387.5. B) $518.5. C) $316. D) $412. 120. Which of the following would increase GDP by the greatest amount? A) a $20 billion reduction 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 increase in government spending 121. Which of the following is correct? A) Government expenditures and taxes both increase GDP. B) Government expenditures and taxes both decrease GDP. C) Government expenditures increase, but taxes decrease, GDP. D) Government expenditures decrease, but taxes increase, GDP. 122. Which of the following would reduce GDP by the greatest amount? 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 spending 123. What do investment and government expenditures have in common? A) both represent injections to the circular flow B) both represent leakages from the circular flow C) neither is subject to the multiplier effect D) both represent a decline in indebtedness 124. Taxes represent: A) a leakage of purchasing power, like saving. B) an injection of purchasing power, like investment. C) an injection of purchasing power, like government spending. D) a leakage of purchasing power, like government spending. 125. In moving from a private closed economy to a mixed closed economy in the aggregate expenditures model, government spending must be: A) added to saving. Page 22 B) added to consumption and gross investment. C) subtracted from consumption and gross investment. D) added to gross investment and saving. Use the following to answer questions 126-130: The following information is for a closed economy: GDP $100 200 300 400 500 600 700 C $100 160 220 280 340 400 460 S $ 0 40 80 120 160 200 240 Ig $80 80 80 80 80 80 80 126. Refer to the above information. If both government spending and taxes are zero, the equilibrium level of GDP: A) is $200. B) is $300. C) is $400. D) is $500. 127. Refer to the above information. If government now spends $80 billion at each level of GDP and taxes remain at zero, the equilibrium GDP: A) will rise to $700. B) will rise to $600. C) will rise to $500. D) may either rise or fall. 128. Refer to the above information. The introduction of $80 billion of government spending has: A) lowered the multiplier from 2.5 to 2.0. B) increased the multiplier from 2.5 to 3.0. C) increased the multiplier from 2.0 to 2.5. D) had no effect on the size of the multiplier. 129. Refer to the above information. If in addition to spending $80 billion at each level of GDP, government imposes a lump-sum tax of $100: A) equilibrium GDP will now be $350. B) equilibrium GDP will now be $400. C) equilibrium GDP will now be $300. D) the equilibrium GDP cannot be determined. 130. Refer to the above information. The addition of a $100 billion lump-sum tax: A) reduces the MPC and increases the multiplier. B) increases the MPC and decreases the multiplier. C) increases both the MPC and the multiplier. Page 23 D) has no effect on either the MPC or the multiplier. 131. ln moving from a private closed to a mixed closed economy in the aggregate expenditures model, taxes: A) must be added to gross investment. B) must be added to saving. C) must be added to consumption and gross investment. D) have no impact upon the equilibrium GDP. 132. Suppose government finds it can increase the equilibrium real GDP $45 billion by increasing government purchases by $18 billion. On the basis of this information we can say that the: A) MPS in this economy is .4. B) MPC in this economy is .4. C) balanced-budget multiplier does not apply in this economy. D) multiplier is 3. Use the following to answer questions 133-135: Answer the next question(s) on the basis of the following table: GDP $ 500 510 520 530 540 550 560 570 Before taxes C S $ 480 $ 20 486 24 492 28 498 32 504 36 510 40 516 44 522 48 After taxes Ca Sa $ 474 $ 16 480 20 486 24 492 28 498 32 504 36 510 40 516 44 133. The tax in the above economy is a: A) 10 percent proportional tax. B) lump-sum tax of $20. C) lump-sum tax of $10. D) progressive tax. 134. The MPC and MPS in the above economy: A) are .4 and .6 respectively. B) are .6 and .4 respectively. C) are .8 and .2 respectively. D) cannot be determined from the information given. 135. Refer to the above table. If an additional lump-sum tax of $20 were imposed, we would expect: A) equilibrium GDP to fall by $30. B) equilibrium GDP to fall by $20. C) equilibrium GDP to fall by $50. D) equilibrium GDP to rise by $24. Page 24 136. Suppose the multiplier is 4 and lump-sum taxes are increased by $16 in a closed economy. We can predict that: A) GDP will increase by $64. B) GDP will decrease by $64. C) the aggregate expenditures schedule will shift downward by $12. D) inflation will occur. 137. In a mixed open economy, which of the following all affect the equilibrium GDP in the same direction? A) Ca, Ig, Sa, and M B) Sa, T, and M C) Ig, T, and Ca D) Sa, Ig, and X 138. In the aggregate expenditures model, a reduction in taxes may: A) increase saving. B) decrease real GDP. C) increase unemployment. D) reduce consumption. 139. In the aggregate expenditures model, an increase in government spending may: A) decrease real GDP. B) increase output and employment. C) shift the aggregate expenditures schedule downward. D) reduce the size of the inflationary gap. 140. If a $20 billion increase in government expenditures increases equilibrium GDP by $50 billion then: A) the expenditures multiplier is 2. B) the MPC for this economy is .6. C) inflation is occurring. D) the MPS for this economy is .6. 141. If a $10 billion decrease in lump-sum taxes increases equilibrium GDP by $40 billion then: A) the expenditures multiplier is 4. B) the MPC for this economy is .8. C) the MPC for this economy is .6. D) the expenditures multiplier is 3. 142. A lump-sum tax means that: A) the tax only applies to one time period. B) the same amount of tax revenue is collected at each level of GDP. C) tax revenues vary directly with GDP. D) tax revenues vary inversely with GDP. 143. In an aggregate expenditures diagram, a lump-sum tax (T ) will: A) not affect the C + Ig + Xn line. B) shift the C + Ig + Xn line upward by an amount equal to T . Page 25 C) shift the C + Ig + Xn line downward by an amount equal to T . D) shift the C + Ig + Xn line downward by an amount equal to T MPC. 144. If government increases lump-sum taxes by $20 billion and the economy's MPC is .6, then the: A) consumption schedule will shift upward by $12 billion. B) consumption schedule will shift downward by $12 billion. C) equilibrium GDP will increase by $40 billion. D) equilibrium GDP will decrease by $40 billion. 145. The effect of imposing a lump-sum tax is to: A) reduce the absolute levels of consumption and saving at each level of GDP and to reduce the size of the multiplier. B) reduce the absolute levels of consumption and saving at each level of GDP, but to not change the size of the multiplier. C) reduce the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier. D) increase the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier. 146. Suppose that unintended increases in inventories are occurring in a mixed closed economy. We can surmise that: A) Ig + T > Sa + G. B) T + G > Sa + Ig. C) T + Sa > Ig + G. D) T + Sa < Ig + G. 147. If a lump-sum tax of $40 billion is imposed and the MPC is 0.6, the saving schedule will: A) shift downward by $24 billion. B) shift upward by $24 billion. C) shift downward by $16 billion. D) shift upward by $16 billion. 148. If the MPC in an economy is .75, a $1 billion increase in taxes will ultimately reduce consumption by: A) $1 billion. B) $.75 billion. C) $3 billion. D) $4 billion. 149. If the MPC in an economy is .9, a $1 billion increase in government spending will ultimately increase consumption by: A) $1 billion. B) $.9 billion. C) $10 billion. D) $9 billion. 150. If the marginal propensity to save in a closed economy is 0.25 and a lump-sum tax is imposed, the slope of the economy's aggregate expenditures schedule will be: Page 26 A) B) C) D) .25. less than the slope before the tax. greater than the slope before the tax. .75. 151. If the marginal propensity to consume in an economy is 0.8, net exports are zero, and government spending is $33 billion at each level of real GDP, the slope of the economy's aggregate expenditures schedule will be: A) .8. B) .2. C) 5. D) .125. Balanced-budget multiplier 152. The balanced-budget multiplier indicates that: A) equal increases in government spending and taxation will widen an existing recessionary gap. B) equal increases in govemment spending and taxation increase the equilibrium GDP. C) a small government deficit might have a contractionary or deflationary impact on the economy. D) if business saving is zero, that is, business receipts equal resource costs, supply will necessarily create its own demand. 153. The basic consideration that underlies the balanced-budget multiplier is that: A) tax increases are subject to a larger multiplier effect than are increases in government expenditures. B) many taxes (for example, payroll taxes) are legally linked to disbursement programs (for example, old age and survivors insurance). C) declines in government spending invariably cause increases in private investment spending. D) individuals and businesses reduce their expenditures by some amount less than any increase in their taxes. 154. If APC = .6 and MPC = .5, a simultaneous increase in both taxes and government spending of $20 will: A) decrease GDP by $20. B) decrease GDP by $40. C) increase GDP by $20. D) increase GDP by $40. 155. The balanced-budget multiplier suggests that: A) a short-run increase in the public debt will increase the equilibrium GDP and reduce the public debt in the long run. B) equal decreases in government spending and tax collections will reduce the equilibrium GDP. C) equal reductions in government spending and tax collections will leave the equilibrium GDP unchanged. D) equal increases in government spending and tax collections will reduce the equilibrium GDP. 156. Suppose that a Constitutional amendment requires that the government always balance its budget. If it is desired to increase GDP by $30 billion, government: A) should increase G by $30 billion and reduce T by $30 billion. B) should increase G and T both by $30 billion. Page 27 C) should reduce G and T both by $30 billion. D) would be unable to bring about the desired growth of GDP. 157. The value of the balanced budget multiplier: A) varies directly with the MPS. B) varies directly with the MPC. C) is equal to 1. D) is 1/(1 - MPS). 158. The balanced-budget multiplier assumes that: A) taxes and government purchases both decrease, rather than increase. B) tax changes are equal to changes in government purchases. C) tax changes are less than changes in government purchases. D) tax changes are greater than changes in government purchases. 159. If government increases its purchases by $15 billion and the MPC is 2/3, then we would expect the equilibrium GDP to: A) increase by $30 billion. B) increase by $45 billion. C) decrease by $35 billion. D) increase by $50 billion. 160. If government increases its tax revenues by $15 billion and the MPC is 2/3, then we can expect the equilibrium GDP to: A) decrease by $30 billion. B) decrease by $45 billion. C) decrease by $35 billion. D) decrease by $55 billion. 161. The principle embodied in your answers to the previous two questions is that: A) equal increases in government spending and taxes do not change the equilibrium GDP. B) equal increases in government spending and taxes reduce the equilibrium GDP. C) equal increases in government spending and taxes increase the equilibrium GDP. D) taxes have a stronger effect upon equilibrium GDP than do government purchases. 162. In an aggregate expenditures diagram equal increases in government spending and in lump-sum taxes will: A) shift the aggregate expenditures line downward. B) shift the aggregate expenditures line upward. C) not affect the aggregate expenditures line. D) reduce the equilibrium GDP. 163. Equal increases in government purchases and taxes will: A) increase the equilibrium GDP and the size of that increase varies directly with the size of the MPC. B) increase the equilibrium GDP and the size of that increase is independent of the size of the MPC. C) increase the equilibrium GDP and the size of that increase varies inversely with the size of the MPC. D) decrease the equilibrium GDP and the size of that decrease is independent of the size of the MPC. Page 28 164. Assume in a private economy that the equilibrium level of income is $380 and the MPS is 0.25. Now suppose government collects taxes of $50 and spends the entire amount. As a result: A) the equilibrium level of real income and the price level will both remain unchanged. B) nominal wage rates will fall. C) the equilibrium level of income will rise to $420. D) the equilibrium level of income will rise to $430. Recessionary and inflationary gaps 165. An "inflationary gap" is the amount by which: A) equilibrium GDP falls short of the full-employment GDP. B) aggregate expenditures exceed any given level of domestic output. C) saving exceeds investment at the full-employment GDP. D) aggregate expenditures exceed the full-employment level of domestic output. 166. A "recessionary gap" is: A) the amount by which the full-employment GDP exceeds the level of aggregate expenditures. B) the amount by which equilibrium GDP falls short of the full-employment GDP. C) the amount by which investment exceeds saving at the full-employment GDP. D) the amount by which aggregate expenditures exceed the full-employment level of domestic output. Use the following to answer questions 167-177: Consumption (after taxes) $ -20 0 20 40 60 80 100 Gross investment $10 10 10 10 10 10 10 Net exports $ +5 +5 +5 +5 +5 +5 +5 Government purchases $15 15 15 15 15 15 15 Real GDP 0 10 40 70 100 130 160 167. Refer to the above table. The economy shown is a: A) private economy. B) private open economy. C) mixed closed economy. D) mixed open economy. 168. Refer to the above table. The after-tax MPC in the economy shown is: A) .5. B) .67. C) .75. D) .8. 169. Refer to the above table. The after-tax MPS in the economy shown is: Page 29 A) B) C) D) .1. .2. .33. .4. 170. Refer to the above table. The multiplier in the economy shown is: A) 5. B) 4. C) 3. D) 2. 171. Refer to the above table. Equilibrium GDP in the economy shown is: A) $40. B) $70. C) $100. D) $130. 172. Refer to the above table. If the full-employment real GDP in the economy shown is $100 the: A) inflationary gap is $30. B) inflationary gap is $10. C) recessionary gap is $20. D) recessionary gap is $10. 173. Refer to the above table. If the full-employment real GDP in the economy shown is $40 the: A) inflationary gap is $20. B) inflationary gap is $10. C) recessionary gap is $30. D) recessionary gap is $10. 174. Refer to the above table. If the full-employment real GDP in the economy shown is $70 the: A) inflationary gap is $30. B) inflationary gap is $10. C) recessionary and inflationary gaps are both $0. D) recessionary gap is $10. 175. Refer to the above table. In the economy shown, exports might be ____ and imports ____. A) $10; $5. B) $10; $0. C) $0; $5. D) $5; 10. 176. Refer to the above table. In the economy shown, an increase in net exports of $10 would: A) increase real GDP by $10. B) increase real GDP by $30. C) decrease real GDP by $10. D) decrease real GDP by $30. Page 30 177. Refer to the above table. In the economy shown, a decrease in government purchases of $5 would: A) increase real GDP by $5. B) increase real GDP by $10. C) decrease real GDP by $5. D) decrease real GDP by $15. Use the following to answer questions 178-181: 178. Refer to the above diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE3, the: A) inflationary gap is BC. B) recessionary gap is BC. C) recessionary gap is ed. D) inflationary gap is ed. 179. Refer to the above diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE1, the: A) inflationary gap is BC. B) recessionary gap is BC. C) inflationary gap is zero. D) inflationary gap is ei. 180. Refer to the above diagram. If the full-employment level of GDP is B and aggregate expenditures are at AE2, the: A) inflationary gap is ed. B) recessionary gap is BC. C) inflationary gap is eg. D) economy is in equilibrium, at full employment. Page 31 181. Refer to the above diagram. The value of the multiplier for this economy is: A) BC/hg. B) BC/AB. C) ed/di. D) df/BC. 182. A recessionary gap exists if: A) planned investment exceeds saving at the full-employment GDP. B) the aggregate expenditures schedule lies below the 45-degree line at the full-employment GDP. C) the aggregate expenditures schedule intersects the 45-degree line at any level of GDP. D) the aggregate expenditures schedule lies above the 45-degree line at the full-employment GDP. 183. Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion. If the MPC is 0.625, what change in aggregate expenditures is needed to achieve full employment? A) a decrease of $12 billion B) an increase of $25 billion C) an increase of $10 billion D) an increase of $15 billion 184. Cyclical unemployment in the United States is essentially the consequence of: A) procyclical fiscal policies. B) a deficient level of aggregate expenditures. C) rapid technological progress. D) the geographic immobility of the labor force. 185. If the MPS is .25 and the economy has a recessionary gap of $5 billion, then equilibrium GDP is: A) $5 billion below the full-employment GDP. B) $5 billion above the full-employment GDP. C) $20 billion below the full-employment GDP. D) $20 billion above the full-employment GDP. 186. Which of the following statements concerning the equilibrium level of GDP is incorrect? A) there will be no tendency for businesses to alter the aggregate rate of production B) full employment will necessarily be realized C) no unintended changes in inventories will occur D) leakages equal injections 187. If the economy is in equilibrium at $400 billion of GDP and the full-employment GDP is $500 billion: A) real and nominal GDP will both increase. B) GDP will remain at $400 billion unless aggregate expenditures change. C) real GDP will increase, but nominal GDP will decrease. D) the price level will increase. 188. If an increase in aggregate expenditures results in no increase in real GDP we can surmise that the: A) economy is in a deep recession. B) MPC equals 1. Page 32 C) economy is already operating at full employment. D) price level has fallen. 189. When the level of domestic output is $500 billion, the level of aggregate expenditures: A) may be greater than, less than, or equal to $500 billion. B) must be greater than $500 billion, because investment will occur. C) must be less than $500 billion, because saving will occur. D) must also be $500 billion. 190. If the MPC is .50, all taxes are lump-sum taxes, and the equilibrium GDP is $40 billion below the fullemployment GDP, then the size of the recessionary gap: A) is $40 billion. B) is $20 billion. C) is $60 billion. D) cannot be determined from the information given. Applications and critiques 191. The recessionary (depressionary) gap associated with the Great Depression of the 1930s resulted from: A) the government's attempt to control hyperinflation. B) a major increase in personal and corporate taxes. C) a precipitous decline in investment spending. D) a rapid increase in imports resulting from large tariff reductions. 192. Which of the following was not a contributing cause of the decline in investment and thus the recessionary (depressionary) gap occurring during the Great Depression? A) overcapacity in major industries B) pessimism relating to the stock market crash C) leveling off, and eventual collapse, of residential construction D) a large increase in the money supply 193. The Great Depression of the 1930s provides a good example of: A) demand-pull inflation. B) cost-push inflation. C) a recessionary (depressionary) gap. D) the repercussions of hyperinflation. 194. During the Vietnam war (late 1960s), the economy experienced: A) cost-push inflation. B) an inflationary gap. C) a recessionary gap. D) cyclical unemployment. 195. The inflationary gap associated with the Vietnam war years (late 1960s) was caused by: A) a rapid increase in net exports. B) a major tax increase. Page 33 C) rising investment and government expenditures. D) cost-push inflationary forces. 196. In the last half of the 1990s, Japan's economy experienced: A) a recessionary gap. B) an investment boom. C) an inflationary gap. D) rapid inflation. 197. Viewed through the aggregate expenditures model, Japan's recession in the late 1990s resulted mainly from: A) a fall in the average propensity to save. B) insufficient (planned) investment relative to saving. C) reduced government spending. D) increased taxes. 198. Which one of the following is not a shortcoming of the aggregate expenditures model? A) failure to show price level changes B) failure to allow for premature demand-pull inflation C) failure to account for cost-push inflation D) failure to account for cyclical unemployment 199. A shortcoming of the aggregate expenditures model is that it does not: A) account for cost-push inflation. B) explain how demand-pull inflation can arise. C) explain how cyclical unemployment can arise. D) detail the components of aggregate spending. Last Word Questions 200. (Last Word) Art Buchwald's article "Squaring the Economic Circle" is a humorous description of: A) a recessionary gap. B) an inflationary gap. C) the marginal propensity to save. D) the multiplier. 201. (Last Word) Art Buchwald's article "Squaring the Economic Circle" humorously describes how: A) a person's decision not to buy an automobile eventually reduces many people's incomes, including that of the person making the original decision. B) a price increase on a single product eventually leads to rapid inflation. C) an increase in imports eventually leads to a greater increase in exports. D) a government tax rate increase eventually results in the government collecting less tax revenue than before the tax rate hike. True/False Questions Page 34 202. The slope of the saving schedule measures the size of the multiplier. 203. The equilibrium level of GDP always coincides with the full-employment GDP. 204. The greater the MPC, the greater the multiplier. 205. If the MPS is 1, the multiplier will be 1. 206. The multiplier is equal to the reciprocal of the MPC. 207. Exports are added to, and imports are subtracted from, aggregate expenditures in moving from a closed to an open economy. 208. For an open mixed economy the equilibrium level of GDP is determined where Sa + Ig + X = T + G. 209. Equal increases in government expenditures and tax collections will leave the equilibrium GDP unchanged. 210. A $10 billion decrease in taxes will increase the equilibrium GDP by more than would a $10 billion increase in government expenditures. 211. A lump-sum tax causes the after-tax consumption schedule to be flatter than the before-tax consumption schedule. 212. If government decreases its purchases by $20 billion and the MPC is 0.8, equilibrium GDP will decrease by $100 billion. 213. If the MPC is .9, a $20 billion increase in a lump-sum tax will reduce GDP by $200 billion. 214. A recessionary gap in a mixed open economy can be measured as the extent to which aggregate expenditures (Ca + Ig + Xn + G) fall short of real GDP at the full-employment level of real GDP. 215. The recessionary gap is the amount by which the equilibrium GDP and the full-employment GDP differ. 216. The aggregate expenditures schedule has a negative slope. 217. The aggregate expenditures model does not allow for premature demand-pull inflation. Page 35 Page 36 Answer Key -- ch10 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. C C D C D D D C B D B C A B B C A B C C D B B C C B A D C B A C D D D A A C B A A D B C B C B B D C C C A D Page 37 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. B D B A B D D B C B D D C A D B C B D D D C B D B D A D D D C A B C A C B C A B A C B D C C D B D B C C D C D D Page 38 111. 112. 113. 114. 115. 116. 117. 118. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. 134. 135. 136. 137. 138. 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150. 151. 152. 153. 154. 155. 156. 157. 158. 159. 160. 161. 162. 163. 164. 165. 166. C B C D D B A C A D C D A A B B C D A D B A C B A C B A B B B B D B B C C C D D A B D C B B C B B A C B B D D A Page 39 167. 168. 169. 170. 171. 172. 173. 174. 175. 176. 177. 178. 179. 180. 181. 182. 183. 184. 185. 186. 187. 188. 189. 190. 191. 192. 193. 194. 195. 196. 197. 198. 199. 200. 201. 202. 203. 204. 205. 206. 207. 208. 209. 210. 211. 212. 213. 214. 215. 216. 217. D B C C B D B C A B D C D D A B D B C B B C A B C D C B C A B D A D A False False True True False True False False False False True False True False False True Page 40 ... View Full Document

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