1. Planned real investment is determined by the: a. rate of interest. b. the mar
ID: 1245919 • Letter: 1
Question
1. Planned real investment is determined by the: a. rate of interest. b. the marginal propensity to save. c. the marginal tax rate. d. money supply. 2.If the price level rises the multiplier effect on real GDP will be: a.stronger than if the price level were constant. b.weaker than if the price level were constant. c.unknown. d. the same as if the price level had not changed 3.Suppose that disposable income increases in an economy. Which of the following relationships must always be true? a. Disposable income is equal to the change in saving plus the change in consumption. b. Dissaving plus saving must equal consumption. c. The change in disposable is equal to saving plus consumption. d. The change in disposable income is equal to the change in saving plus the change in consumption. 4. Current disposable income held to buy consumption goods in the future is referred to as: a. Future savings. b.autonomous consumption. c.saving. d.future consumption. 5.Suppose that an economy is in equilibrium at a real GDP of $15 trillion at a price level of 100. An increase in autonomous expenditures of $0.30 trillion takes place. The current multiplier is 5. If the short run aggregate supply curve is horizontal, the new equilibrium value of real GDP will be: a. 16.50 trillion b. 1.50 c. 0.30 d. 15.30 6.Suppose that an economy is in equilibrium at a real GDP of $ 15 trillion at a price level of 100. The short run aggregate supply curve is upward sloping and there is an increase in autonomous expenditures of $0.30 trillion. This increase in expenditures enabled the real GDP to increase to $15.50 trillion. The change in the price level has changed the multiplier to: a. 4.42 b. 4.70 c. 1.667 d. 2.944Explanation / Answer
1) a. 2) d. 3) d. 4) c. 5) b. 6) d.
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