Practice Quiz 2

Practice Quiz 2 - Practice for Quiz 2 ECO4203 Chapter 10:...

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Practice for Quiz 2 ECO4203 Dr. Norrbin Chapter 10: Keynesian-cross model and IS curve 1. The simple investment function shows that investment ______ as ______ increases. A) decreases; the interest rate B) increases; the interest rate C) decreases; government spending D) increases; government spending 2. 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. 3. In the Keynesian-cross model, a decrease in the interest rate ______ planned investment spending and ______ the equilibrium level of income. A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases 4. In the Keynesian-cross model with a given MPC , the government-expenditure multiplier ______ the tax multiplier. A)
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This note was uploaded on 02/24/2011 for the course ECO 4203 taught by Professor Norrbin during the Spring '11 term at FSU.

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Practice Quiz 2 - Practice for Quiz 2 ECO4203 Chapter 10:...

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