ECON_102__5__McCullough_ylow_EconFinalReview - 1. The...

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1. The largest item of government outlays is____. a. Debt interest b. Debt reduction c. Expenditures on goods and services d. Transfer payments 2. Because of automatic stabilizers, when real GDP increases a. The economy will automatically go to full employment b. Government expenditures increase and tax revenues decrease c. Government expenditures decrease and tax revenues increase d. Government expenditures equal tax revenues 3. What is the marginal propensity to consume, MPC in figure on the board? a. 1 b. 0.9 c. 0.67 d. $3 trillion 4. The slope of the consumption function is equal to a. Marginal propensity to save b. Marginal propensity to consume c. Marginal propensity to consume divided by the marginal propensity to save d. Marginal propensity to save divided by the marginal propensity to consume 5. If unplanned inventories rise, aggregate planned expenditure is ____ RGDP and firms ___ their production a. Greater than, increase b. Greater than, decrease c. Less than, increase d. Less than, decrease 6. If the slope of the AE curve is 0.8, the multiplier equals a. 10 b. 5 c. 2 d. 0.5 7. Demand-pull inflation occurs when a. Aggregate demand increases persistently b. Aggregate supply and aggregate demand decrease persistently c. The government increases its purchases d. Oil prices increase substantially 8. In a demand-pull inflation, the AD curve shifts ___ and the SAS curve shifts ____ a. Rightward; rightward b. Rightward; leftward c. Leftward; rightward
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d. Leftward; leftward 9. Cost-push inflation might start with a. A rise in money wage rates
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This note was uploaded on 10/10/2011 for the course ECON 102 taught by Professor Singerman during the Spring '08 term at Iowa State.

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ECON_102__5__McCullough_ylow_EconFinalReview - 1. The...

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