Use the following diagram and your intuition to answer the next fivequestions.
40. The government removes
a tariff on imported consumer goods. What is the most
likely short-run effect on the aggregate price level and the level
of unemployment?
A. Price level increases, unemployment
increases.
B. Price level increases, unemployment
decreases.
C. Price level decreases, unemployment
increases.
D. Price level decreases, unemployment
decreases.
41. The level of aggregate
output demanded decreases as the aggregate price level increases
because
A. higher prices make market interest rates
decrease.
B. as prices increase, producers will sell
more output.
C. higher prices decrease the value of
household wealth.
D. as prices increase, producers withhold output
in anticipation of even higher prices.
42. There is an increase in
government spending. Aggregate output will __________
and the aggregate price level will ___________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
43. There is an increase in
saving by households. Unemployment will ___________ and
inflation will ___________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
44. In an aggregate
demand/aggregate supply diagram, ____________ is plotted on the
vertical axis and _____________ is plotted on the horizontal
axis.
A. price; quantity
B. aggregate price level; aggregate
output
C. quantity; price
D. aggregate output; aggregate price level
45. In a closed economy,
with no government sector, when planned saving is less than planned
investment
A. actual investment will exceed actual
saving.
B. actual saving will exceed actual
investment.
C. unplanned inventory investment will be
positive.
D. unplanned inventory investment will be
negative.
46. In the short run, if
private investment increases we could correctly state that
A. the aggregate demand curve will shift to the
right.
B. private saving will increase because
investment and saving must be equal.
C. private saving will decrease because
investment is the opposite of saving.
D. the aggregate demand curve will shift to the
left.
47. Which of the following
is included in GDP but not in national income?
A. Capital consumption allowance.
B. Undistributed corporate profits.
C. Personal income taxes.
D. Dividends.
48. In Arbez, between 2008
and 2009, nominal GDP rose by 3.6% while real GDP fell by 1.2%. We
can conclude that, between 2008 and 2009, the aggregate price
level
A. rose by about 4.8%.
B. rose by about 2,4%.
C. fell by about 2.4%.
D. fell by about 4.8%.
49. GDP is 1,200,
consumption is 900, planned gross private investment is 150,
exports are 50, imports are 125. Government spending is
300. Inventories will
A. rise by 75.
B. rise by 325.
C. fall by 75.
D. fall by 325.
50. The value of GDP can be
found by adding together
A. wages, investment, government spending, and
depreciation.
B. consumption, government spending,
transfer payments, and net exports.
C. wages, consumption, investment, and
imports.
D. consumption, investment, government spending,
and net exports.
In: Economics
a) What is the present value of $1,200 per year, at a discount rate of 8 percent, if the first payment is received 9 years from now and the last payment is received 28 years from now?
b) ABC Co. wants to sell you an annuity that will pay you $500 per quarter for 25 years. You want to earn a minimum rate of return of 5.1 percent. What is the most you are willing to pay today to buy this annuity?
c) You are scheduled to receive annual payments of $4,000 for
each of the next 8 years. The discount rate is 8 percent.
Part 1: What is the present value if you receive these payments at
the beginning of each year rather than at the end of each
year?
Part 2: What is the difference in the present value if you receive
these payments at the beginning of each year rather than at the end
of each year?
d) Prepare an amortization schedule for a five-year loan of $60,000. The interest rate is 7 percent per year, and the loan calls for equal annual payments.
In: Finance
4. Which of the following statements is (are) correct?
(x) If households view a tax cut as being temporary, the tax cut
has more of an effect on aggregate demand than if households view
it as permanent.
(y) A decrease in taxes is an example of an expansionary fiscal
policy and that policy will probably cause the aggregate demand
curve to shift to the right.
(z) An increase in government purchases coupled with a decrease in
taxes is an expansionary fiscal policy that will increase the
budget deficit.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only.
E. (x) only
5. which of the following statements is (are) correct?
(x) The multiplier effect is the multiplied impact on aggregate
demand of a given increase in government purchases of goods and
services.
(y) The marginal propensity to consume (MPC) is defined as the
fraction of extra income that a household consumes rather than
saves and the larger the MPC the larger the multiplier
effect.
(z) According to the multiplier effect, an increase in government
purchases causes interest rates to increase which increases
investment spending.
A. (x), (y) and (z) B. (x) and (y) only
C. (x) and (z) only D. (y) and (z) only.
E. (y) only
Which of the following statements is (are) correct?
(x) According to the textbook, an increase in government spending
on goods to build or repair transportation infrastructure and
education facilities shifts the aggregate demand curve to the right
and, in the long run, shifts the aggregate supply curve to the
right.
(y) According to the crowding-out effect, an increase in government
purchases causes interest rates to rise and the interest rate
increase causes an increase in investment spending.
(z) The multiplier effect amplifies the effects of an increase in
government expenditures, while the crowding-out effect diminishes
the effects.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only.
E. (z) only
In: Finance
4. Which of the
following statements is (are) correct?
(x) If households view a tax cut as being temporary, the tax cut
has more of an effect on aggregate demand than if households view
it as permanent.
(y) A decrease in taxes is an example of an expansionary fiscal
policy and that policy will probably cause the aggregate demand
curve to shift to the right.
(z) An increase in government purchases coupled with a decrease in
taxes is an expansionary fiscal policy that will increase the
budget deficit.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only.
E. (x) only
5. , which of the following statements is (are) correct?
(x) The multiplier effect is the multiplied impact on aggregate
demand of a given increase in government purchases of goods and
services.
(y) The marginal propensity to consume (MPC) is defined as the
fraction of extra income that a household consumes rather than
saves and the larger the MPC the larger the multiplier
effect.
(z) According to the multiplier effect, an increase in government
purchases causes interest rates to increase which increases
investment spending.
A. (x), (y) and (z) B. (x) and (y) only
C. (x) and (z) only D. (y) and (z) only.
E. (y) only
6. Which of the
following statements is (are) correct?
(x) According to the textbook, an increase in government spending
on goods to build or repair transportation infrastructure and
education facilities shifts the aggregate demand curve to the right
and, in the long run, shifts the aggregate supply curve to the
right.
(y) According to the crowding-out effect, an increase in government
purchases causes interest rates to rise and the interest rate
increase causes an increase in investment spending.
(z) The multiplier effect amplifies the effects of an increase in
government expenditures, while the crowding-out effect diminishes
the effects.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only.
E. (z) onl
In: Economics
Keeping it together and falling apart: Women’s dynamic experience of birth.
what is the purpose of the study
what is the approach used to stu the problem of interest
which data collection method is used in this study
In: Nursing
There are four basic inventory cost flow assumptions. What are they and how are they calculated? What is the impact of each on the balance sheet and on the income statement when:
1. Prices are rising?
2. Prices are falling?
In: Accounting
Does current flow from positive to negative, or negative to positive? Which way does current flow across the membrane during the rising phase of the action potential? During the falling phase?
In: Biology
In: Economics
A small coin, initially at rest, begins falling. If the clock starts when the coin begins to fall, what is the magnitude of the coin's displacement between t1 = 0.188 s and t2 = 0.845 s?
In: Physics
2. Define New Terms: Free Fall Acceleration, Air Resistance, and Terminal Velocity.
3. Offer a brief explanation for the discrepancy between the accelerations of the small and large balls for free falling.
In: Physics