201_HW4_(10-26-09) - Econ201 Macroeconomics Homework#4(20...

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Econ201: Macroeconomics Homework #4 (20 points) Multiple-Choice Questions (one point each): Please put your answers on scantron. 1. The aggregate demand curve is: A) vertical if full employment exists. B) horizontal when there is considerable unemployment in the economy. C) downsloping because of the interest-rate, real-balances, and foreign purchases effects. D) downsloping because production costs decrease as real output rises. 2. The consumption schedule shows: A) that the MPC increases in proportion to GDP. B) that households consume more when interest rates are low. C) that consumption depends primarily on the level of business investment. D) the amounts households plan or intend to consume at various possible levels of aggregate income. 3. Which one of the following will cause a movement down along an economy's consumption schedule? A) an increase in stock prices B) a decrease in disposable income C) a decrease in stock prices D) an increase in consumer indebtedness 4. Which of the following will not tend to shift the consumption schedule upward? A) a currently small stock of durable goods in the possession of consumers B) the expectation of a future decline in the consumer price index C) a currently low level of household debt. D) the expectation of future shortages of essential consumer goods. 5.
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This note was uploaded on 12/18/2009 for the course ECONOMICS 122112 taught by Professor Kimrahg during the Spring '09 term at George Mason.

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201_HW4_(10-26-09) - Econ201 Macroeconomics Homework#4(20...

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