chapter 08.rtf - Exam Name MULTIPLE CHOICE Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) What was the key factor leading to the growth of steel production capacity in GCC countries after 2004? 1) _______ A) Lack of indigenous iron ore B) The boom in the construction industry C) Low costs for fuel D) The downturn in the economic cycle 2) When aggregate expenditure is less than GDP, which of the following is true? 2) _______ A) There was unplanned inventory investment. B) Households bought more new homes than they anticipated. C) Firms spent more on capital goods than they anticipated. D) All of the above must be true when aggregate expenditure is greater than GDP. 3) An unplanned increase in inventories results in 3) _______ A) actual investment that is less than planned investment. B) an increase in planned investment.
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C) a decrease in planned investment. D) actual investment that is greater than planned investment. 4) In the wake of the global crisis, the layoffs in the Gulf threatened to send many Jordanian workers home. Some economists see this as an opportunity for the Jordanian economy. Why? 4) _______ A) The government will subsidize the wages of these workers to reduce unemployment. B) The Jordanian workers can earn higher wages in Jordan. C) These workers are expected to spend their saved incomes inside the country, creating a new wave of demand, increasing growth prospects of the Jordanian economy. D) None of the above. 5) If the marginal propensity to save is 0.25, then a $10 million decrease in disposable income will 5) _______ A) increase consumption by $2,500. B) decrease consumption by $7,500. C) decrease consumption by $2,500. D) increase consumption by $7,500. 6) Increases in the price level will 6) _______ A) raise consumption because real wealth increases.
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B) lower consumption because real wealth decreases. C) raise consumption because some goods and services are more affordable. D) lower consumption because goods and services are less affordable. 7) Which of the following is not a component of aggregate expenditure? 7) _______ A) consumption spending B) government spending C) actual investment spending D) planned investment spending 8) A decrease in Social Security payments will 8) _______ A) decrease export spending. B) decrease consumption spending. C) decrease investment spending. D) decrease government spending. 9) If the MPC is .95, then a $10 million increase in disposable income will 9) _______
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A) increase consumption by $9.5 million. B) increase consumption by $950 million. C) increase consumption by $200 million. D) decrease consumption by $105 million. 10) Disposable income is defined as 10) ______ A) national income + transfers + taxes. B) national income - transfers + taxes. C) national income + transfers - taxes. D) national income - transfers - taxes. Figure 19 - 1
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11) Refer to Figure 19 - 1. According to the figure above, at what point is aggregate expenditure greater than GDP?
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  • Spring '18
  • Ashraf Galal Eid
  • Macroeconomics, Gdp, Consumption function, aggregate expenditure

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