Chapter_10_McB - 1. In the aggregate expenditures model, it...

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1. In the aggregate expenditures model, it is assumed that investment: A) automatically changes in response to changes in real GDP. B) changes by less in percentage terms than changes in real GDP. C) does not respond to changes in interest rates. D) does not change when real GDP changes. Use the following to answer questions 2-5: 2. Refer to the above diagrams. Curve A: A) is an investment schedule and curve B is a consumption of fixed capital schedule. B) is an investment demand curve and curve B is an investment schedule. C) and B are totally unrelated. D) shifts to the left when curve B shifts upward. 3. Refer to the above diagrams. Other things equal, Curve B will shift upward when: A) the level of GDP increases. B) the interest rate increases. C) curve A shifts to the left. D) curve A shifts to the right. 4. Refer to the above diagrams. Other things equal, an interest rate decrease will: A) shift curve A to the right and shift curve B upward. B) shift curve A to the left and shift curve B downward. C) leave curve A in place but shift curve B downward. D) leave curve A in place but shift curve A upward. Page 1
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5. Refer to the above diagrams. Other things equal, an interest rate increase will: A) shift curve A to the right and shift curve B upward. B) shift curve A to the left and shift curve B downward. C) leave curve A in place but shift curve B downward. D) leave curve A in place but shfit curve A upward.
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This note was uploaded on 11/29/2009 for the course U.M. economics taught by Professor Casti during the Spring '09 term at Université Joseph Fourier Grenoble I.

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Chapter_10_McB - 1. In the aggregate expenditures model, it...

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