AP Macro

Ch. 9-10 Exam Review

Coach Knox
Ch. 9
1. Given a table of data how doe! one find the MPC and MP"#
$. %ow i! e&'ilibri'm G(P determined '!in) the a))re)ate ex*endit're! model#
+. %ow i! it *o!!ible to determine di!!avin) and !avin) )iven a table of data#
,. -hat doe! the ,.-de)ree line on a chart relatin) con!'m*tion and income
re*re!ent#
.. -hat are the determinant! of inve!tment !*endin)#
/. -hat are the non-income determinant! that will chan)e the 'nderl0in) condition!
of the inve!tment demand c'rve#
1. -hat i! the difference between an inve!tment demand c'rve and an inve!tment
!ched'le#
2. -hat doe! an 'n*lanned chan)e in inventorie! !'))e!t! in a *rivate clo!ed
econom0#
9. -hat i! the relation!hi* between the real intere!t rate and the level of inve!tment#
10. -hat are the determinant! that ca'!e a !hift in the con!'m*tion !ched'le#
11. -hat i! the mo!t im*ortant determinant of con!'m*tion and !avin) in the
a))re)ate ex*endit're! model#
1$. -hat effect do taxe! have on the con!'m*tion and !avin) !ched'le!#
1+. %ow doe! one determine the MPC if )iven onl0 the MP"#
1,. %ow i! the MPC determined '!in) onl0 the a))re)ate ex*endit're! model#
1.. -hat i! the difference between a *rivate clo!ed econom0 *rivate o*en econom0
and a mixed o*en econom0# (raw one )ra*h ill'!tratin) the addition of each
cate)or0 of !*endin).
1/. Ex*lain three wa0! in which one can find the m'lti*lier.
11. -hat i! the !i)nificance of the m'lti*lier#
12. 3f the MPC i! ./ the m'lti*lier will be 44444444#
19. 3f MPC i! .1 and )ro!! inve!tment increa!e! b0 5+ billion the e&'ilibri'm G(P
will increa!e b0 44444444444#
Ch. 10_
1. %ow doe! one find net ex*ort!#
$. (raw the a))re)ate ex*endit're! model of and o*en econom0 from a clo!ed
econom0 '!in) a *o!itive level of net ex*ort!. -hat wo'ld ha**en if dome!tic
ex*ort! declined or im*ort! ro!e#
+. %ow doe! the health of the 6.".7! forei)n tradin) *artner! have an effect on the
health of o'r own econom0#
,. -hat are the com*onent! of G(P in a mixed o*en econom0#
.. 3f a chan)e in the ta!te! of American con!'mer! ca'!e! them to *'rcha!e more
forei)n )ood! at each level of 6.". G(P then how will thi! affect e&'ilibri'm
G(P in a *rivate o*en econom0#
/. At what *oint doe! one determine the e&'ilibri'm level of G(P in a mixed o*en
econom0#
1. Ex*lain the !i)nificance of a rece!!ionar0 )a*# Ex*lain how an inflationar0 )a*
occ'r!# 3ll'!trate where the a))re)ate ex*endit're! !ched'le i! located in relation
to f'll-em*lo0ment G(P for both a rece!!ionar0 )a* and an inflationar0 )a*.
2. Ex*lain the balanced b'd)et m'lti*lier#
9. %ow m'ch wo'ld G(P increa!e if )overnment !*endin) wa! to increa!e b0 5100
billion and the MPC i! ./1#
10. 3f a l'm*-!'m income tax of 5$. i! levied and the MP" i! .$ ex*lain how thi!
wo'ld im*act the a))re)ate ex*endit're! model.
11. -h0 are taxe! and !avin)! con!idered a lea8a)e of *'rcha!in) *ower#
1$. -h0 doe! a chan)e in G have more of an im*act on a))re)ate ex*endit're! than a
chan)e in 9axe!#
1+. -hat i! the form'la for the tax m'lti*lier#
1,. A!!'me the MPC i! .2. 3f )overnment were to im*o!e 5.0 billion of new taxe! on
ho'!ehold income con!'m*tion !*endin) wo'ld decrea!e b0 how m'ch#