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9, it can be
concluded that:
Saving is $90 billion
-Assume that an increase in a household's disposable income from $40,000 to $48,000 leads to an
increase in consumption from $35,000 to $41,000, then the:
Slope of the consumption schedule is .75
-If the consumption schedule is a straight line, it can be concluded that the:
MPC is constant at various levels of income
-Refer to the data above. If disposable income is $550, we would expect consumption to be:
$460
-Refer to the data above. If plotted on a graph, the slope of the consumption schedule would be:
.9
-Refer to the data above. The marginal propensity to save in this economy is:
.1
-Refer to the data above. At the $320 billion level of disposable income, the average propensity to
.80.
dissaving is $5.
-Refer to the given data. If disposable income was $325, we would expect consumption to be:
$305.
-The relationship between the real interest rate and investment is shown by the:
investment demand schedule.
-The investment demand curve will shift to the right as a result of:
technological progress.
-If 100 percent of any change in income is spent, the multiplier will be:
infinitely large.
-The size of the multiplier is equal to the:
reciprocal of the slope of the saving schedule.
-If the MPC is .70 and investment increases by $3 billion, the equilibrium GDP will:
increase by $10 billion.
-If, in an economy, a $200 billion increase in consumption spending creates $200 billion of new
income in the first round of the multiplier process and $160 billion in the second round, the marginal
propensity to consume and the multiplier are, respectively:
0.8 and 5.0
-Assume the marginal propensity to consume is 0.8. If consumer spending increases by $20 billion,
then real GDP will:
Increase by $100 billion
-Assume that MPS is 0.4. If spending increases by $8 billion, then real GDP will increase by:
$20 billion
-In the aggregate expenditures model, it is assumed that investment:
Does not change when real GDP changes.
-Refer to the diagram for a private closed economy. The equilibrium level of GDP is:
$300.
-Refer to the diagram for a private closed economy. At the equilibrium level of GDP, investment and
saving are both:
$50.
-Refer to the diagram for a private closed economy. The $400 level of GDP is:
both .5.
-Suppose that the level of GDP increased by $100 billion in a private closed economy where the
marginal propensity to consume is .5. Aggregate expenditures must have increased by:
$50 billion.
-Other things equal, if a change in the tastes of American consumers causes them to purchase
more foreign goods at each level of U.S. GDP, then:
U.S. real GDP will fall.
-If the multiplier in an economy is 5, a $20 billion increase in net exports will:
increase GDP by $100 billion.
-Assume the MPC is .8. If government were to impose $50 billion of new taxes on household
income, consumption spending would initially decrease by:
$40 billion.
-If a lump-sum income tax of $25 billion is levied and the MPS is .20, the:
consumption schedule will shift downward by $20 billion.
-A $1 increase in government spending on goods and services will have a greater impact on the
equilibrium GDP than will a $1 decline in taxes because:
a portion of a tax cut will be saved.
-The following schedule contains data for a private closed economy. All figures are in billions. Use
these data in answering the question.
Refer to the data. If gross investment is $10 at all levels of GDP, the equilibrium GDP will
be:
$220.
-The following schedule contains data for a private closed economy. All figures are in billions. Use
these data in answering the question.
Refer to the data. If a lump-sum tax of $20 is imposed, the consumption schedule will
become:
Refer to the information. If both government spending and taxes are zero, the
equilibrium level of GDP is:
$300.
-The following information is for a closed economy:
Refer to the information. If government now spends $80 billion at each level of
GDP and taxes remain at zero, the equilibrium GDP:
will rise to $500.
-The following information is for a closed economy:
Refer to the information. If government spends $80 billion at each level of GDP,
and imposes a lump-sum tax of $100:
equilibrium GDP will now be $350.
-The seven members of the Board of Governors of the Federal Reserve System are:
appointed by the president with the confirmation of the Senate.
-Commercial banks and thrift institutions:
have become increasingly similar in recent years.
-(Consider This) Credits cards are:
not money, as officially defined.
-Which of the following are all assets to a commercial bank?
Vault cash, property, and reserves.
-The reserves of a commercial bank consist of:
deposits at the Federal Reserve Bank and vault cash.
-The primary purpose of the legal reserve requirement is to:
provide a means by which the monetary authorities can influence the lending ability of
commercial banks.
-The ABC Commercial Bank has $5,000 in excess reserves and the reserve ratio is 30 percent.
This information is consistent with the bank having:
$90,000 in checkable deposit liabilities and $32,000 in reserves.
-When a check is drawn and cleared, the
bank against which the check is cleared loses reserves and deposits equal to the amount
of the check.
-Suppose the ABC bank has excess reserves of $4,000 and outstanding checkable deposits of
$80,000. If the reserve requirement is 25 percent, what is the size of the bank's actual
reserves?
$24,000.
-Excess reserves refer to the:
difference between actual reserves and required reserves.
-A reserve requirement of 20 percent means a bank must have $1,000 of reserves if its
checkable deposits are:
$5,000
-Assume the Continental National Bank's balance statement is as follows:
Refer to the data. The commercial banking system has excess reserves of:
$9 billion.
-Answer the question on the basis of the following consolidated balance sheet for the
commercial banking system. Assume the required reserve ratio is 30 percent. All figures are in
billions.
Refer to the data. The maximum amount by which the commercial banking system can expand
the supply of money by lending is:
$30 billion.
-Answer the question on the basis of the following consolidated balance sheet for the
commercial banking system. Assume the required reserve ratio is 30 percent. All figures are in
billions.