Question 1

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) the full-employment level of income (Y_F)in Table 9.2 is $800 billion,

Accepted Answer

Based on the information provided, the full-employment level of income is $800 billion. However, the equilibrium level of income is not given. We can determine that there is a recessionary gap by comparing the actual level of income (which is not given) to the full-employment level of income. If the actual level of income is less than the full-employment level of income, there is a recessionary gap. In this case, the actual level of income is $775 billion ($800 billion - $25 billion), which is less than the full-employment level of income. Therefore, there is a recessionary gap of $25 billion.

Question 2

A decrease in U.S.exports to Japan can be represented by

Accepted Answer

A decrease in U.S. exports to Japan would reduce overall spending in the economy, causing the aggregate expenditure curve to shift downward.

Question 3

Use the following figure to answer the questions : Figure9.1:

-In Figure 9.1,at an income level of $2,000 billion,

Accepted Answer

At an income level of $2,000 billion, if saving equals $0, it means that all income is being consumed, indicating that consumption equals income, and there is no saving or dissaving.

Question 4

Use the following figure to answer the questions : Figure9.6: - In Figure 9.6,if full employment occurs at Q_C, then aggregate demand is

Accepted Answer

If full employment occurs at point S1U1B0, it indicates that the aggregate demand is too low, causing cyclical unemployment as there are not enough job opportunities available to the workforce.

Question 5

One In the News article titled "Consumer Confidence Index at All-Time Low" indicates that consumer confidence decreased.As a result,which of the following is most likely to happen?

Accepted Answer

A decrease in consumer confidence means that people are less likely to make purchases, therefore their autonomous consumption will decrease. This can lead to a decrease in total spending as well. Investment and government spending are not directly affected by consumer confidence.

Question 6

Use the following figure to answer the questions : Figure9.6: -In Figure 9.6,if full employment occurs at Q_A, then aggregate demand is

Accepted Answer

Full employment occurs at the intersection of the short-run aggregate supply (SAS) curve and the long-run aggregate supply (LAS) curve. In this case, it occurs at Q_A,. If aggregate demand is at this level, it is too great and causing an inflationary gap because it exceeds the economy's level of full employment output.

Question 7

One In the News article titled "News Release: Personal Income and Outlays" says,"Personal consumption expenditure (PCE)increased 95 billion,or 1.0 percent." An increase in spending is likely the result of

Accepted Answer

An increase in personal consumption expenditure is most likely due to an increase in income, as people have more money to spend.

Question 8

Use the following figure to answer the questions : Figure9.1:
 
-Using Figure 9.1,dissaving occurs at all income levels

Accepted Answer

Dissaving occurs when the saving rate is negative, i.e. when spending exceeds income. From Figure 9.1, we can see that the saving rate is negative for all income levels below $2,000 billion, indicating that dissaving occurs at these levels.

Question 9

Use the following figure to answer the questions : Figure9.3:
 
-the MPC in the economy depicted in Figure 9.3

Accepted Answer

The Marginal Propensity to Consume (MPC) is constant if it does not change with varying levels of disposable income, which is typically depicted as a straight line in economic models.

Question 10

Use the following figure to answer the questions : Figure9.5:
 
-In Figure 9.5,a movement from Point A to Point C would result from

Accepted Answer

A decrease in interest rates typically encourages more investment and spending, which can shift the economy from one point to another on a graph, such as from Point A to Point C, indicating increased economic activity.

Question 11

Assume there is a decrease in government purchases and exports.Currently there is a recessionary gap,which implies that

Accepted Answer

When there is a recessionary gap, it means that actual output is less than potential output, leading to an accumulation of inventories as businesses produce more than is being purchased due to decreased government purchases and exports.

Question 12

In Figure 9.2,if the consumption function shifts from C₁ to C_2, it can be determined that the

Accepted Answer

When the consumption function shifts upward, it means that at any given level of income, people are consuming more than before. This indicates an increase in both the marginal propensity to consume (MPC) and the average propensity to consume (APC) at each income level. Therefore, the correct choice is A.

Question 13

Use the following figure to answer the questions : Figure9.5:
 
-A movement from Point A to Point B in Figure 9.5 would result in

Accepted Answer

Movement from Point A to Point B represents an increase in consumer spending or investment, leading to an increase in aggregate demand.

Question 14

If we assume that government expenditure,investment,and net exports are not affected by income,the slope of the consumption function equals

Accepted Answer

The slope of the consumption function is the marginal propensity to consume (MPC), which is the same as the slope of the aggregate expenditure curve when government expenditure, investment, and net exports are constant.

Question 15

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) If the full-employment level of income (Y_F)in Table 9.2 is $700 billion,

Accepted Answer

The answer of Use the following table to answer the...

Question 16

Use the following figure to answer the questions : Figure9.1:

-Using Figure 9.1,the amount of autonomous consumption is

Accepted Answer

Autonomous consumption is the level of consumption that occurs when income is zero, typically represented by the y-intercept of the consumption function.

Question 17

A sudden increase in confidence by the business community could best be represented by

Accepted Answer

A sudden increase in confidence by the business community would likely lead to increased investment and spending, causing the aggregate expenditure curve to shift upward.

Question 18

Use the following figure to answer the questions : Figure9.3:
 
-According to Figure 9.3,which of the following is true?

Accepted Answer

According to Figure 9.3, when disposable income is zero, consumption is $10 billion. Therefore, option B is true. Option A is incorrect because dissaving is not shown in the graph. Option C is incorrect because the APC cannot be greater than 1 as it represents a fraction of income spent on consumption. Option D is incorrect because consumption is not zero when disposable income is $20 billion.

Question 19

Use the following figure to answer the questions : Figure9.1:

-According to Figure 9.1,saving equals zero at an income level of

Accepted Answer

According to the figure, the saving line intersects with the x-axis (which represents income level) at a point that corresponds to $2,000 billion. This means that at an income level of $2,000 billion, the saving is equal to zero. Therefore, option C is the correct choice.

Question 20

One In the News article titled,"News Release: Personal Income and Outlays" says that personal income increased $20 billion,or 0.17 percent,and consumers are likely to spend more if

Accepted Answer

The article specifically states that personal income increased and this could lead to consumers spending more, indicating a correlation between income and spending.

Quiz 9: Aggregate Demand Appendix: the Keynesian Cross

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) the full-employment level of income (Y_F) in Table 9.2 is $800 billion,

A decrease in U.S.exports to Japan can be represented by

Use the following figure to answer the questions : Figure9.1: -In Figure 9.1,at an income level of $2,000 billion,

Use the following figure to answer the questions : Figure9.6: - In Figure 9.6,if full employment occurs at Q_C, then aggregate demand is

One In the News article titled "Consumer Confidence Index at All-Time Low" indicates that consumer confidence decreased.As a result,which of the following is most likely to happen?

Use the following figure to answer the questions : Figure9.6: -In Figure 9.6,if full employment occurs at Q_A, then aggregate demand is

One In the News article titled "News Release: Personal Income and Outlays" says,"Personal consumption expenditure (PCE) increased 95 billion,or 1.0 percent." An increase in spending is likely the result of

Use the following figure to answer the questions : Figure9.1: -Using Figure 9.1,dissaving occurs at all income levels

Use the following figure to answer the questions : Figure9.3: -the MPC in the economy depicted in Figure 9.3

Use the following figure to answer the questions : Figure9.5: -In Figure 9.5,a movement from Point A to Point C would result from

Assume there is a decrease in government purchases and exports.Currently there is a recessionary gap,which implies that

In Figure 9.2,if the consumption function shifts from C₁ to C_2, it can be determined that the

Use the following figure to answer the questions : Figure9.5: -A movement from Point A to Point B in Figure 9.5 would result in

If we assume that government expenditure,investment,and net exports are not affected by income,the slope of the consumption function equals

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) If the full-employment level of income (Y_F) in Table 9.2 is $700 billion,

Use the following figure to answer the questions : Figure9.1: -Using Figure 9.1,the amount of autonomous consumption is

A sudden increase in confidence by the business community could best be represented by

Use the following figure to answer the questions : Figure9.3: -According to Figure 9.3,which of the following is true?

Use the following figure to answer the questions : Figure9.1: -According to Figure 9.1,saving equals zero at an income level of

One In the News article titled,"News Release: Personal Income and Outlays" says that personal income increased $20 billion,or 0.17 percent,and consumers are likely to spend more if

Quiz 9: Aggregate Demand Appendix: the Keynesian Cross

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) the full-employment level of income (YF) in Table 9.2 is $800 billion,

A decrease in U.S.exports to Japan can be represented by

Use the following figure to answer the questions : Figure9.1: -In Figure 9.1,at an income level of $2,000 billion,

Use the following figure to answer the questions : Figure9.6: - In Figure 9.6,if full employment occurs at QC, then aggregate demand is

One In the News article titled "Consumer Confidence Index at All-Time Low" indicates that consumer confidence decreased.As a result,which of the following is most likely to happen?

Use the following figure to answer the questions : Figure9.6: -In Figure 9.6,if full employment occurs at QA, then aggregate demand is

One In the News article titled "News Release: Personal Income and Outlays" says,"Personal consumption expenditure (PCE) increased 95 billion,or 1.0 percent." An increase in spending is likely the result of

Use the following figure to answer the questions : Figure9.1: -Using Figure 9.1,dissaving occurs at all income levels

Use the following figure to answer the questions : Figure9.3: -the MPC in the economy depicted in Figure 9.3

Use the following figure to answer the questions : Figure9.5: -In Figure 9.5,a movement from Point A to Point C would result from

Assume there is a decrease in government purchases and exports.Currently there is a recessionary gap,which implies that

In Figure 9.2,if the consumption function shifts from C1 to C2, it can be determined that the

Use the following figure to answer the questions : Figure9.5: -A movement from Point A to Point B in Figure 9.5 would result in

If we assume that government expenditure,investment,and net exports are not affected by income,the slope of the consumption function equals

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) If the full-employment level of income (YF) in Table 9.2 is $700 billion,

Use the following figure to answer the questions : Figure9.1: -Using Figure 9.1,the amount of autonomous consumption is

A sudden increase in confidence by the business community could best be represented by

Use the following figure to answer the questions : Figure9.3: -According to Figure 9.3,which of the following is true?

Use the following figure to answer the questions : Figure9.1: -According to Figure 9.1,saving equals zero at an income level of

One In the News article titled,"News Release: Personal Income and Outlays" says that personal income increased $20 billion,or 0.17 percent,and consumers are likely to spend more if

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) the full-employment level of income (Y_F) in Table 9.2 is $800 billion,

Use the following figure to answer the questions : Figure9.6: - In Figure 9.6,if full employment occurs at Q_C, then aggregate demand is

Use the following figure to answer the questions : Figure9.6: -In Figure 9.6,if full employment occurs at Q_A, then aggregate demand is

In Figure 9.2,if the consumption function shifts from C₁ to C_2, it can be determined that the

Use the following table to answer the questions : Table9.2: -Complete Table 9.2.(Data are expressed in billions of dollars. ) If the full-employment level of income (Y_F) in Table 9.2 is $700 billion,