Self-Quiz Unit 3.pdf - Self-Quiz Unit 3 Started on State Completed on Time taken Grade Question 1 Thursday 15 February 2018 6:04 PM Finished Thursday 15

Self-Quiz Unit 3.pdf - Self-Quiz Unit 3 Started on State...

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Unformatted text preview: 10/3/2018 Self-Quiz Unit 3 Started on State Completed on Time taken Grade Question 1 Thursday, 15 February 2018, 6:04 PM Finished Thursday, 15 February 2018, 6:52 PM 48 mins 1 sec 9.00 out of 10.00 (90%) Disposable personal income is Correct Mark 1.00 out of 1.00 Flag question Select one: a. the income households receive after paying personal taxes and personal debt. b. the income households earn from supplying labor services for the production of aggregate output. c. the income households receive after paying personal taxes. d. the income households have leftover after paying personal taxes and purchasing necessities. The correct answer is: the income households receive after paying personal taxes. Question 2 Incorrect A graph that depicts the relationship between the total quantity of goods and services demanded and the price level is the Mark 0.00 out of 1.00 Select one: Flag question a. aggregate demand curve. b. average price level. c. circular flow model. d. GDP curve. The correct answer is: aggregate demand curve. Question 3 The bulk of aggregate demand in the United States consists of Correct Mark 1.00 out of 1.00 Flag question Select one: a. consumption. b. investment. c. government spending. d. net exports. The correct answer is: consumption. Question 4 Correct Which of the following best explains the multiplier effect as a result of a $100 million increase in government spending on highways? Mark 1.00 out of 1.00 Select one: 1/4 10/3/2018 Flag question Self-Quiz Unit 3 a. To fund the government spending, more money must be printed. The resulting increase in money supply lowers interest rates which in turn stimulates consumption and investment spending. b. The initial change in spending will cause an increase in real GDP and it also becomes income to someone else. As a result, the government’s tax revenue increases which in turn allows the government to further increase its spending. c. The government spending creates a demand for domestically produced goods and services which in turn increases income and higher incomes will lead to increased consumption. d. The initial change in government spending creates a supply of jobs and stimulates production of domestically produced goods and services. The resulting increases in wages and investment demand leads to increased real GDP. The correct answer is: The government spending creates a demand for domestically produced goods and services which in turn increases income and higher incomes will lead to increased consumption. Question 5 The income households receive less the personal income taxes they pay is Correct Mark 1.00 out of 1.00 Flag question Select one: a. net savings. b. disposable personal income. c. gross private domestic investment. d. personal consumption. The correct answer is: disposable personal income. Question 6 Correct In the long run, an increase in aggregate demand, all other things unchanged, will cause the price level to Mark 1.00 out of 1.00 Select one: Flag question a. increase and potential output to increase. b. decrease and potential output to decrease. c. increase and potential output to remain stable. d. decrease and potential output to remain stable. The correct answer is: increase and potential output to remain stable. Question 7 What is the interest rate effect that explains why the aggregate demand curve slopes downward? Correct Mark 1.00 out of 1.00 Flag question Select one: a. It refers to the effect of changes in the price level on quantity of investment demanded which in turn affects interest rates. 2/4 10/3/2018 Self-Quiz Unit 3 b. It refers to the effect of interest rates on borrowing which in turn affects consumption spending. c. It refers to the effect of changes in the price level on interest rates which in turn affects the quantity of investment demanded. d. It refers to the shifts in aggregate demand when interest rates change. The correct answer is: It refers to the effect of changes in the price level on interest rates which in turn affects the quantity of investment demanded. Question 8 The consumption function shows Correct Mark 1.00 out of 1.00 Flag question Select one: a. the amount of consumption at each level of aggregate demand, holding all other determinants constant. b. the amount of consumption at each price level, holding all other determinants constant. c. the amount of consumption at each level of disposable income, holding all other determinants constant. d. the amount of consumption at each wage rate holding all other determinants constant. The correct answer is: the amount of consumption at each level of disposable income, holding all other determinants constant. Question 9 Wage and price stickiness Correct Mark 1.00 out of 1.00 Flag question Select one: a. gives rise to a vertical long-run aggregate supply curve. b. gives rise to a vertical short-run aggregate supply curve. c. creates a surplus or a shortage of real GDP. d. prevents the economy from producing its potential level of real GDP. The correct answer is: prevents the economy from producing its potential level of real GDP. Question 10 The economy’s potential output corresponds to the level of Correct Mark 1.00 out of 1.00 Flag question Select one: a. natural employment. b. frictional unemployment. c. structural unemployment. d. cyclical unemployment. 3/4 10/3/2018 Self-Quiz Unit 3 The correct answer is: natural employment. 4/4 ...
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