03-02-2009 84458 PM

03-02-2009 84458 PM - (^*-^-r C) less than equilibrium and...

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16) The assumptions with respect to consumption and saving in the simple macroeconomic model include that A) MPS and MPC are both negative, the sum of MPC and MPS is zero. B) APS decreases as income rises. .* x> C) APC decreases as income rises. rsPC-•—"—:— /*rC *L t D) MPS and MPC are both negative. J | E) MPC is negative below the break-even level of income. ' 17) When compared to a simple macro economic model (with only consumption and investment), 17) adding government and trade causes the AE curve to A) remain stationary. B) have a larger autonomous component. C) become downward sloping to the right D) become perfectly horizontal. E) have a smaller autonomous component. !=• 18) If (S+T-G) national saving is greater than (J+X-IM), desired national asset formation national 18) L. output is - A) less than equilibrium and will rise toward equilibrium. —*""< / v3 -^ *""•" **- ' I B) less than equilibrium but will remain constant.
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Unformatted text preview: (^*-^-r C) less than equilibrium and will decreases away from equilibrium. D) greater than equilibrium and will remain constant. E) greater than equilibrium and will decrease toward equilibrium. 19) Suppose G = 300 and the income-tax rate is 30 percent. The government budget is in surplus foi 19) only those incomes A) less than 350. / OTn ^ /&gt;&gt; * 3&amp;V B) less than 1 000. C) greater than 1 000. D) greater than 2 500. E) greater than 3 000. 7 /&quot;^% 1 - f^ I N ( ~~~ Vj/ 1 T. -\J V ^^~ * 20) If the marginal propensity to spend is 0.5, and the MPC is 0.7, a $1 billion reduction in government purchases will cause equilibrium national income to by . A) decrease; $2.00 billion B) decrease; $1.50 billion C) increase; $2.00 billion D) increase; $3.33 billion E) decrease; $3.33 billion C...
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This note was uploaded on 01/15/2012 for the course ECON 104 taught by Professor Peter during the Summer '09 term at Camosun College.

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