assessment5 - Assessment 5 (Due: 5:10pm, 17 Oct (Fri))...

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Unformatted text preview: Assessment 5 (Due: 5:10pm, 17 Oct (Fri)) Submit via WebCT!!! 1) here is an unplanned increase in inventories when T A) ctual inventory investment equals planned inventory investment. a B) ctual inventory investment is less than planned inventory investment. a C) ctual inventory investment is greater than planned inventory investment. a D) firm experiences much higher sales than expected. a 2) decrease in Social Security payments will A A) ecrease consumption spending. d B) ecrease investment spending. d C) ecrease government spending. d D) ecrease export spending. d 3) stock market crash which causes stock prices to fall should cause A A) decrease in consumption spending. a B) n increase in consumption spending. a C) n increase in wealth. a D) o change in consumption spending. n 4) n increase in the real interest rate will A A) ause consumers to spend more and save less. c B) ost likely lower consumerʹs purchases of durable goods. m C) ost likely lower the reward to savings. m D) ost likely lower the cost of borrowing. m 5) iven the following consumption schedule, G Consumption Disposable Income $600 $1,000 $900 $1,500 $1,200 $2,000 The marginal propensity to consume is A) 5 . B) 6 . C) 75 . D) 8 . 1 Assessment 5 (Due: 5:10pm, 17 Oct (Fri)) Submit via WebCT!!! 6) f the economy is currently in equilibrium at a level of GDP that is below potential GDP, I which of the following would move the economy back to potential GDP? A) n increase in wealth a B) n increase in interest rates a C) decrease in business confidence a D) n increase in the value of the dollar relative to other currencies a 7) f planned aggregate expenditures are below potential GDP, and planned aggregate I expenditures equal GDP then A) ctual inventory investment will be less than planned inventory investment. a B) ctual inventory investment will be greater than planned inventory investment. a C) he economy is in a recession. t D) he economy is at full employment. t 8) f inflation in the U.S. is higher than inflation in other countries, what will be the effect on I net exports for the U.S.? A) et exports will rise as U.S. exports increase n B) et exports will rise as U.S. imports decrease n C) et exports will decrease as U.S. exports decrease n D) et exports will decrease as U.S. imports decrease n 9) hich of the following is a true statement about the multiplier? W A) he multiplier solely depends on the MPC. T B) he smaller the MPC, the smaller the multiplier. T C) he multiplier is a value between zero and one. T D) he multiplier effect does not occur when autonomous expenditures decrease. T 10) hich of the following correctly describes how an increase in the price level affects W consumption spending? A) n increase in the price level raises real wealth which causes consumption to increase. A B) n increase in the price level decreases the amount of money a household needs to buy A goods, raises the interest rate, which causes consumption to increase. C) n increase in the price level increases the amount of money a household needs to buy A goods, raises the interest rate, which causes consumption to increase D) n increase in the price level lowers real wealth which causes consumption to A decrease. 2 Assessment 5 (Due: 5:10pm, 17 Oct (Fri)) Submit via WebCT!!! 3 ...
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This note was uploaded on 04/22/2010 for the course ECONOMICS ECON1002 taught by Professor None during the Spring '10 term at Hong Kong Institute of Vocational Education.

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