MULTIPLE CHOICES There are 25 multiple choices each questions is worth 2 points.

Question

MULTIPLE CHOICES There are 25 multiple choices each questions is worth 2 points. 1. The functions of money are to serve as a: A. Resource B. Unit of account, store of value, and medium of exchange C. Determinant of consumption, investment, and government spending D. Factor of production, exchange, and aggregate supply allocator, method for accounting, and means of income distribution of money demanded exceeds the money supply, the interest rate will: 2. If in the market for money the quantity demanded A. fall, causing households and businesses to hold less money B. rise, causing households and businesses to hold less money C. rise, causing households and businesses to hold more money D. fall, causing households and businesses to hold more money. 3. Which of the following is correcr? A. APC APS-1. B. APC + MPS-1 C. APS + MPC- D. APS + MPS- 1 4. As disposable income increases, consumption: A. and saving both increase. B. and saving both decrease. C. decreases and saving increases. D. increases and saving decreases 5. The simple multiplier I/MPS: paying of A. Understates the actual multiplier because it includes leakages in domestic spending from the purchase of imports or the B. Understates the actual multiplier because it excludes leakages in domestic spending from the purchase of imports or the paying of taxes C. Overstates the paying of taxes D. Overstates the actual multiplier because it excludes leakages in domestic paying of taxes actual multiplier because it includes leakages in domestic spending from the purchase of imports or the spending from the purchase of imports or the policy to increase spending by S2 billion. The MPS is 0.2. What crease in real GDe from the change in govemment spending assuming that the aggregate supply curve is 6. The economy is in a recession. The government enacts a horizontal across the range of GDP being considered? A. S6 billion B. $8 billion C. $10 billion D. $16 billion an increase in a houschold's disposable income from $35,000 to $45,000 leads to an increase in 7. If you know that consumption from $30,000 to $38,000, then you can conclude that the: A. Slope of the consumption schedule is .75 B. Average propensity to consume is.8 C. Marginal propensity to save is 25 D. Marginal propensity to consume is 8 8. Two basic determinants of investment spending are: A. Consumer spending and government spending B. Expected returns and real interest rate C. General price level and the level of output D. Domestic trade and international trade

Explanation / Answer

1. The correct answer is B.

2. The correct answer is B.

3. The correct answer is A.

4. The correct answer is B.

5. The correct answer is D.

6. The correct answer is C.

7. The correct answer is D.

8. The correct answer is B.

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