Tb03sansans - Chapter 3 The Simple Keynesian Theory of Income Determination 1 In the simplest Keynesian model of the determination of income

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 3 The Simple Keynesian Theory of Income Determination 1) In the simplest Keynesian model of the determination of income, interest rates are assumed to be A) exogenous and to gradually change. B) endogenous and to gradually change. C) exogenous and to remain constant. D) endogenous and to remain constant. 2) In the simplest Keynesian model of the determination of income, interest rates are assumed A) to be exogenous and to influence desired spending. B) to be endogenous and not to influence desired spending. C) to be endogenous and to influence desired spending. D) to be exogenous and not to influence spending. 3) In the simple Keynesian model of the determination of income, the price level is assumed to be A) exogenous and to gradually change. B) endogenous and to gradually change. C) exogenous and to remain constant. D) endogenous and to remain constant. 4) A fixed or rigid price level implies A) that income is fixed. B) real GDP is greater than nominal GDP. C) nominal GDP is less than real GDP. D) real GDP equals nominal GDP. 5) What type of variables have their movements explained by theory? A) endogenous B) exogenous C) autonomous D) Both B and C 41 6) If total planned spending (E(p)) exceeds GDP, we expect that A) inventories will be falling. B) inventories will be rising. C) GDP will be falling. D) government expenditures must be rising. Figure 3-1 7) Employing Figure 3-1, autonomous consumption expenditures are ____________, and the marginal propensity to consume is ____________. A) 200; .75 B) 500; 1 C) 200; .60 D) 0; 1 8) As used in this text, "autonomous" variables are A) spontaneous variables that are completely unpredictable. B) completely independent of income, although they can be explained by movements in other variables. C) determined only by income levels. D) the same as endogenous variables. 42 9) The multiplier measures the A) number of steps it takes to move from one equilibrium to another. B) rise in saving resulting from a rise in income. C) marginal propensity to invest. D) rise in equilibrium GDP resulting from a one dollar rise in planned autonomous expenditures. 10) Assuming that there are NO income taxes, if both autonomous taxes, and government expenditures were to rise by $100 million, we would expect equilibrium GDP to A) rise by $100 million. B) rise, but by a multiple of $100 million. C) rise by less than $100 million. D) remain unaffected because leakages have changed by the same amount. 11) The size of the multiplier depends in part on the A) level of autonomous expenditures. B) change in autonomous consumption. C) level of consumption. D) marginal propensity to consume. 12) If disposable income increases by $100 and consumption increased by $85, ceteris paribus, we may conclude that A) the marginal propensity to consume is .85....
View Full Document

This note was uploaded on 12/08/2009 for the course ACCT 101 taught by Professor Jim during the Spring '09 term at CSU Channel Islands.

Page1 / 29

Tb03sansans - Chapter 3 The Simple Keynesian Theory of Income Determination 1 In the simplest Keynesian model of the determination of income

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online