Macro ex 2

At its most basic level, economic growth depends on

creating the right incentives.✅

A decrease in wealth, ______ consumption expenditure and ______

decreases; shifts the consumption function downward✅

If you're MPC is .5 then when your disposable income increases by $100, your consumption expenditure increases by.

$50✅

If the marginal propensity to consume is .85 and there are no imports or income taxes, the expenditure multiplier is equal to.

1 \ (1 - . 85) = 1\ 0.15 = 1.45✅

If a surplus of loanable funds exist in the loanable funds, market the real interest rate, ______, and the quantity of savings _____

Falls ; decreases ✅

The national debt

Grows when the government runs a budget surplus❌ Decreases when the government runs on a budget deficit❌ Equals tax revenue plus outlays❌ Equals tax revenue minus overlays ❌

The supply side effects show that a tax cut on labor, income_______, unemployment and ______ potential GDP

Increase; increase✅

A technological advance, _____aggregate supply, shifting the aggregate supply curve _______, and potentially bringing the ______ phase of the business cycle

Increase; rightward; expansion✅

And increase in technology _____, potential GDP and _______ aggregate supply

Increases; increases✅

If there is no, Ricardo barrel affect our government budget surplus ______ the total supply of loanable funds and _______ real interest rate

Increases; lowers ✅

If aggregate planned expenditure exceeds real​ GDP, then​ _______.

Inventory investment is smaller than planned✅

The Malthusian theory

Is also called the classical growth theory and predicts that we will run out of resources✅

Consumption, expenditure exceeds, disposable income

When there is dissaving✅

If exports increase than the aggregate, expenditure, curve shifts, _______ and equilibrium, expenditure ________

Upward;Increase✅

A fall in the real wage rate ________ firms' profits and leads to ________ in the quantity supplied.

raises; an increase✅

Labor productivity is equal to the quantity of

real GDP produced by one hour of labor.✅

A distinction between stocks and bonds is that

stocks represent ownership claims to the company and bonds do not✅

During an inflationary gap

the aggregate demand curve and the aggregate supply curve intersect at a level of real GDP that exceeds potential GDP. ✅

Macroeconomic equilibrium occurs when

the aggregate quantity demanded is equal to the aggregate quantity supplied✅

Countries that enjoy economic growth

have property rights and markets which provide incentives for discovering new technologies.✅

Which of the following variables is used to determine a country's economic growth? i. Real GDP ii. Wages iii. Inflation

i only ✅

Amon price is $80 and the bond pays eight in interest every year the bonds interest rate is

10% ✅

On January 1 Derek had CD recording devices valued at 30,000 during this year derricks devices depreciated by 20,000 he spent 30,000 on new devices. Derek's net investment was blank and at the end of the year Derek had capital valued at blank.

10,000 ; 40,0000✅

According to the rule of 70 if a country grows at 2% per year instead of 1.5% per year how many fewer years will it take to double its level of real GDP

11.6 years✅

In the given figure, equilibrium, expenditure is equal to

15 trillion✅

If an increase of 10 billion of investment results in an increase in equilibrium expenditure of 40 billion the multiplier equals

40 billion / 10 billion =4 ✅

During this year, Barbara earn 60,000 as a financial analyst paid taxes of 5000 and consumed 53,000 if Barbara's Ralph +4000 at the beginning of the year at the end of the year Barbara's wealth was

6,000✅

When tax revenues, equal government outlays, the situation is referred to as

A balanced budget✅

Discretionary fiscal policy is official policy actions such as

A tax cut initiated by Congress✅

A fiscal stimulus works to close a recessionary gap by shifting the

AD curve rightward✅

Induced expenditures are defined as part of

Autonomous expenditure that response to changes in real GDP❌ Aggregate expenditure that does not respond to changes in real❌ Real GDP that does not respond to changes❌

The above table gives the government outlet in tax revenues from 2015 through 2019 for two countries in 2018 country A had _____ and country be had a ______

Balanced budget; budget deficit ✅

In the labor market, the income tax creates a tax wedge, which raises the _____ wage rate, reduces the blank wage rate in ______ unemployment

Before tax; after tax; deceases ✅

If tax revenues are two $230 billion and the government outlays are two $235 billion than the budget

Deficit is $5 billion and government debt will increase by 5 billion ✅

Crowding out can occur when a government budget _______ raises the real interest rate, and the equilibrium quantity of investment _______

Deficit; decrease✅

If excepted profit falls, the demand for loanable funds, curve shifts blank in the real interest rate blank

Leftward;falls ✅

To eliminate the fiscal gap, the government could

Lower benefits, an increase tax rates ✅

An increase in the price level

Lowers the purchasing power of wealth and cause consumption expenditures to increase✅

If real GDP per person is above the substance level than according to classical growth of theory

More technological advances will occur❌ The pop will decrease❌ The pop will increase ❌ The standard of living will continue to improve ❌

A change in the price level brings a blank, the aggregate supply curve, not a blank, the aggregate supply curve

Movement along, shift in✅

A change in any component of aggregate demand creates a larger change, and overall aggregate demand. This is the blank effect, and it means, for example, that I blink in consumption will cause an even larger blank in ad

Multiplier, decreased, decrease ✅

According to new growth, Siri blank is the factor that motivates technological change

Profit ✅

A measure of growth in the standard of living is the growth in

Real GDP, minus the growth of population✅

Automatic changes in tax revenues and expenditures that occur as a result of fluctuations in a real GDP are referred to as automatic

Stabilizers✅

The given figure shows aggregate demand curves Based on the given figure, the aggregate demand curve will shift from AD0 to AD1 when

The federal reserve lowers its interest-rate✅

Which of the following produces movement along the aggregate demand curve, and does not shift aggregate demand curve

a change in the price level✅

An increase in government, expenditure on goods and services leads to the

aggregate demand curve shifting rightward.✅

A reason for an increase in labor, productivity growth is

an increase in people's human capital.✅

The distinction between physical and financial capital is that

financial capital is used to purchase and operate physical capital.✅

As the real interest rate rises the quantity of loanable funds supplied ______ in the quantity of loanable funds demanded ______

increases, decreases ✅