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Unformatted text preview: Homework 9--Intermediate Macroeconomics-Due on 11/30/2010 I Multiple choices Use the following to answer question 1: Exhibit: Keynesian Cross 1. (Exhibit: Keynesian Cross) In this graph, if firms are producing at level Y 1 , then inventories will ______ inducing firms to ______ production. A) rise; increase B) rise; decrease C) fall; increase D) fall; decrease 2. When planned expenditure is drawn on a graph as a function of income, the slope of the line is: A) zero. B) between zero and one. C) one. D) greater than one. 3. In the Keynesian-cross model with a given MPC , the government- expenditure multiplier ______ the tax multiplier. A) is larger than B) equals C) is smaller than D) is the inverse of the Page 1 4. The Keynesian-cross analysis assumes planned investment: A) is fixed and so does the IS analysis. B) depends on the interest rate and so does the IS analysis. C) is fixed, whereas the IS analysis assumes it depends on the interest rate. D) depends on expenditure and so does the IS analysis. 5. Along an IS curve all of the following are always true except : A) planned expenditures equal actual expenditures....
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This note was uploaded on 02/02/2011 for the course ECO 305 taught by Professor Kisina during the Fall '08 term at SUNY Stony Brook.
- Fall '08