Final Exam Review

Final Exam Review - Final Exam Review Note these sample...

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Note these sample questions relate to the material covered since the second exam only. Your final exam will be comprehensive, and you should use both of the exams to review the previously covered material. 1) If the marginal propensity to consume is 0.8 and savings is assumed to be the only leakage out of the consumption path, then a $100 increase in government spending will lead to? a) an increase in the GDP of $100 b) an increase in the GDP of $125 c) an increase in the GDP of $500 d) an increase in the GDP of $800 e) an increase in the GDP of $1000 2) Which of the following statements is correct? a) an increase in the marginal propensity to save will increase the Fiscal Multiplier b) an increase in the marginal propensity to consume will increase the fiscal multiplier c) a decrease in the marginal propensity to consumer will increase the fiscal multiplier d) the multiplier is not affected by either the marginal propensity to consume or the marginal propensity to save 3) Which of the following statements is correct? a) an increase in marginal propensity to import will reduce the multiplier b) an increase in marginal propensity to import will increase the multiplier c) an increase in the income tax rate will increase the multiplier d) none of the above 4) Which of the following statements is incorrect a) exports are considered as an autonomous expenditure component, since they are a function of the economic conditions of the foreign (importing) economy b) government spending is an induced expenditure component as it is a function of the current GDP c) autonomous expenditure component is defined as an expenditure that is not a function of the current income level d) investment spending is considered as an autonomous component since it is a function of the future income level, not current income level 5) Which of the following statements is correct? a)
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This note was uploaded on 03/06/2012 for the course BIOL 2107 taught by Professor J.louten during the Spring '10 term at SPSU.

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Final Exam Review - Final Exam Review Note these sample...

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