{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

241 final exam

241 final exam - TOPICS 10 Investment Saving and Real...

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

TOPICS 10. Investment, Saving, and Real interest rate 11. The Monetary System 12. Money, Interest and Inflation 13. AD-AS, Business cycle, AE Practice exercise for final exam (with selected answers) 1. Stagflation is defined as a period when real GDP ________ and the price level ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) is constant; rises rapidly 2. If the federal government has a budget deficit, then it is definitely the case that 3. The relationship between disposable income and consumption is 1

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

View Full Document
4. In the figure above, the economy is at an equilibrium with real GDP of \$10 trillion and a price level of 110. At this point there is 5. If the government reduces expenditure on goods and services by \$30 billion, then aggregate demand A) decreases and real GDP decreases. B) decreases and potential GDP decreases. C) increases and real GDP increases. D) increases and potential GDP increases. E) increases and potential GDP decreases. 6. A figure depicting the consumption function shows that the consumption function 7. In the figure above, the economy is at an equilibrium with real GDP of \$10 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the ________ curve will shift ________. 8. In a recession, government spending ________ and induced taxes ________. 2
9. The slope of the consumption function is A) equal to the MPC and is less than 1. B) equal to the MPC and is greater than 1. C) equal to the MPC and is equal to 1. D) not equal to the MPC and is equal to 1. E) not equal to the MPC and is less than 1.

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 14

241 final exam - TOPICS 10 Investment Saving and Real...

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

View Full Document
Ask a homework question - tutors are online