Question 1 During economic fluctuations, markets tend to move Question options:

Question

Question 1 During economic fluctuations, markets tend to move Question options: 1) together. 2) in random directions. 3) in opposite directions. 4) in many different directions.

Question 5 The clearest sign of economic growth is a(n) Question options: 1) increase in nominal GDP. 2) increase in the level of real GDP. 3) decrease in the level of nominal GDP. 4) increase in nominal GDP.

Question 10 Is GDP an accurate measure of a country's well being? Question options: 1) Yes, it is the best measure of national well being. 2) Yes, provided we use real GDP and not nominal GDP. 3) Uncertain, depending on whether GDP is rising or falling. 4) No, it is not.

Question 12 The Marginal Propensity to Consume (MPC) is defined as the change in Question options: 1) C over the change in DI. 2) income over the change in disposable income. 3) DI over the change in C. 4) total income over the change in net income.

Question 14 Consumption functions would shift downward if Question options: 1) disposable incomes fall. 2) disposable incomes rise. 3) price levels fall. 4) price levels rise.

Question 15 Which of the following will most likely cause a shift in the consumption function? Question options: 1) a change in consumer confidence 2) a change in national output 3) a change in real GDP 4) a change in disposable income

Question 16 If consumers' expectations about future income is very optimistic, then we should expect Question options: 1) the consumption function to shift downward. 2) consumers to move up along the consumption function. 3) the consumption function to shift upward. 4) consumers to move down along the consumption function.

Question 17 Which of the following is not part of the investment component of GDP? Question options: 1) residential construction 2) plant and equipment 3) net imports 4) business structures

Question 19 Why does an increase in the price level tend to cause the consumption function to shift downward? Question options: 1) An increase in the price level decreases disposable income. 2) An increase in the price level increases the demand for fixed money assets. 3) An increase in the price level decreases the value of fixed money assets. 4) An increase in the price level decreases saving and increases debt.

Question 24 In economic analysis, which of the following is considered an injection? Question options: 1) saving 2) taxes 3) imports 4) exports

Question 25 Government spending is an injection in the sense that it Question options: 1) increases the amount of total spending. 2) increases the size of the federal deficit. 3) decreases the amount of household saving. 4) decreases the amount of taxes paid.

Explanation / Answer

Question 1 During economic fluctuations, markets tend to move

in opposite directions.

Question 5 The clearest sign of economic growth is a(n)

. 2) increase in the level of real GDP.

Question 10 Is GDP an accurate measure of a country's well being?

Question options: 1) Yes, it is the best measure of national well being.t.

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