Part 1: 20 questions worth 3 points each for a total of 60
points.
FOR FILL-IN-THE-BLANK questions:
If your answer is in decimal
form, round to 2 decimal places. For example, if your answer is .412,
enter it into the fill-in-the-blank as .41, or if your answer is 1.415, enter
it into the fill-in-the-blank as 1.42. If there are no decimals in your
answer, you will simply enter the number; so if your answer is 2, enter
2 with no decimals. Do not enter any extra spaces, do not enter
commas or $ or % symbols.
Question 13 / 3 ptsSuppose the consumption function is: C = a1Yd+ a2WRE/S + a3CC Where all the a’s (the sensitivity parameters) are greater than zero. Initial conditions: Let a1= 0.65, a2= 0.04, a3= 0.5, WRE/S = 18,000: CC= 70 Solve for C in terms of Yd.Select the correct equation.
C = 70 + .65 YdNone of these are correctC = 685 + .64 YdCorrect!C = 755 + .65 YdC = 765 + .60 Yd
Question 23 / 3 ptsUse the equation you found in #1 and let Yd= 2000. C is equal to:
Correct!
Correct Answers
2055
Question 3
3 / 3 pts

Suppose that the stock market rallies so that WRE/S increases to 22,000. Additionally, consumer confidence (CC) rises to 120. Re-solve for C in terms of Yd. Select the correct equation.C = 930 + .60 Y
Question 43 / 3 ptsNow suppose disposable income (Yd) falls due to a tax increase (Uncle Sam is trying to balance the budget) to 1800. Solve for the level of consumption using the equation you found in question #3. Consumption (C) is equal to:
Correct!
Correct Answers
2110
Question 53 / 3 ptsNow we will calculate the level of consumption that would have occurred if Uncle Sam did not raise taxes. In other words, use the equation you found in question 3, but keep Ydat its original value of 2000. Consumption (C) is equal to:
Correct!
Correct Answers
2240
Question 6
3 / 3 pts