quiz5econ4spring2008ABpostwithkeys - Name _ Form A Answer A...

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Name __________________________________ Form A Answer A for True and B for False (for TF questions) Quiz #5 – Econ 4 – spring 2008, Chuderewicz Suppose the economy is characterized as follows; i) AE = C + I + G + (X-M) ii) C = 500 + .80(Y – T) where T = 100 iii) I = 300 – 25(r) where (r) = 5 iv) G = 100 v) X- M = 80 1. Equilibrium output, given the conditions above is a) 3,875 b) 3,000 c) 3,800 d) 4,000 e) none of the above 2. If the Federal Reserve raised interest rates by 2, equilibrium output would fall by: a) 200 b) 175 c) 125 d) 250 e) none of the above 3. If taxes were lowered by 50, the entire aggregate expenditure curve would shift upward by: a) 50 b) 40 c) 37.5 d) 30 e) none of the above 4. Given a tax decrease of 50, equilibrium output will rise by: a) 150 b) 75 c) 225 d) 200 e) none of the above 5. If, along with taxes falling by 50, the federal government decides to increase the level of government purchases by 25, then the total increase in equilibrium output due to these two policies would be: a) 325 b) 250 c) 375 d) 137.5 e) none of the above 6. Suppose consumer confidence rises by 40 so that the entire consumption function shifts upward by 40, as a result, equilibrium income will: (Assume initial conditions except for the change in consumer confidence) a) rise by 200
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This note was uploaded on 05/06/2008 for the course ECON 004 taught by Professor Graf,pauledwin during the Spring '07 term at Pennsylvania State University, University Park.

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quiz5econ4spring2008ABpostwithkeys - Name _ Form A Answer A...

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