ECO/372T Principles Of Macroeconomics The Latest Version A+ Study Guide **********************************************
ECO 372T Entire Course Link http://www.onlinehelp123.com/eco-372 ********************************************** ECO 372T Wk 3 Apply: Quiz If the MPC in an economy is 0.75 and aggregate expenditures increase by $8 billion, then equilibrium GDP will increase by Multiple Choice • $32 billion. • $2.75 billion. • $6 billion. • $40 billion.
Suppose the economy's multiplier is 5. Other things equal, a $40 billion decrease in government expenditures on national defense will cause equilibrium GDP to Multiple Choice • decrease by $200 billion. • decrease by $80 billion. • increase by $200 billion. • decrease by $40 billion. • remain unchanged.
Suppose that an economy produces 500 units of output. It takes 20 units of labor at $15 a unit and 6 units of capital at $50 a unit to produce this amount of output. The per unit cost of production is Multiple Choice • $1.20. • $0.83. • $2.40. • $0.60.
If the marginal propensity to save is 0.1 in an economy, a $30 billion rise in investment spending will increase consumption by Multiple Choice • 270. • 300. • 30. • 3.
If a $200 billion increase in investment spending creates $200 billion of new income in the first round of the multiplier process and $180 billion in the second round, the multiplier in the economy is Multiple Choice • 10. • 5. • 9. • 2.
If the MPC is 0.9 and investment increases by $4 billion, the equilibrium GDP will Multiple Choice • increase by $40 billion. • increase by $3.6 billion. • decrease by $4.44 billion. • increase by $4.44 billion.
Suppose that a new machine tool having a useful life of only one year costs $80,000. Suppose, also, that the net additional revenue resulting from buying this tool is expected to be $88,000. The expected rate of return on this tool is Multiple Choice • 10 percent. • 90 percent. • 9 percent. • 1 percent.
Suppose that real domestic output in an economy is 240 units, the quantity of inputs is 10, and the price of each input is $4. The level of productivity is Multiple Choice • 24. • 240. • 10.
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20.
If the MPC in an economy is 0.60, government could close a recessionary expenditure gap of $15 billion by cutting taxes by Multiple Choice • $25 billion. • $15 billion. • $60 billion. • $9 billion.
Suppose that an economy produces 2,400 units of output, employing 30 units of input, and the price of the input is $20 per unit. The per-unit cost of production is Multiple Choice • $0.25. • $0.50. • $0.10. • $0.80.
If the multiplier in an economy is 3, a $10 billion increase in net exports will Multiple Choice • increase GDP by $30 billion. • reduce GDP by $6 billion. • decrease GDP by $30 billion. • increase GDP by $10 billion.
(Advanced analysis) Assume the following consumption schedule: C = 20 + 0.9Y, where C is consumption and Y is disposable income. At a(n) $600 level of disposable income, the level of saving is Multiple Choice • $40. • $560. • $180. • $18.
Input Quantity Real Domestic Output 100 200 150 300 200 400
The table gives information about the relationship between input quantities and real domestic output in a hypothetical economy. If the price of each input is $5, the per-unit cost of production in the economy is Multiple Choice • $2.50. • $5.00. • $2.75. • $0.40.
Assume a machine that has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,100. The expected rate of return on this machine is Multiple Choice • 5 percent. • 10 percent. • 20 percent. • 1 percent.
If investment increases by $30 billion and the economy's MPC is 0.75, the aggregate demand curve will shift Multiple Choice • rightward by $120 billion at each price level. • rightward by $30 billion at each price level. • leftward by $120 billion at each price level. • leftward by $90 billion at each price level.
If a lump-sum income tax of $50 billion is levied and the MPS is 0.2, the consumption schedule will shift Multiple Choice • downward by $40 billion. • upward by $40 billion. • downward by $50 billion. • downward by $10 billion.
If investment decreases by $6 billion and the economy's MPC is 0.9, the aggregate demand curve will shift Multiple Choice • leftward by $60 billion at each price level. • rightward by $6 billion at each price level. • rightward by $60 billion at each price level.
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leftward by $3 billion at each price level.
Suppose that technological advancements stimulate $14 billion in additional investment spending. If the MPC = 0.8, how much will the change in investment increase aggregate demand? Multiple Choice • $70 billion • $14 billion • $112 billion • $22.2 billion
Assume the MPC is 0.6. If government were to impose $30 billion of new taxes on household income, consumption spending would initially decrease by Multiple Choice • $18 billion. • $30 billion. • $12 billion. • $6 billion.
If the MPC in an economy is 0.8, a $4 billion increase in government spending will ultimately increase consumption by Multiple Choice • $16 billion. • $4 billion. • $0.8 billion. • $20 billion.