If desired investment spending is relatively sensitive to changes in interest rates, then in reducing expenditure monetary policy could be very useful because it would be during inflationary periods and in expanding expenditure during recessionary periods. a. Very ineffective; very ineffective. O b. Very ineffective; very effective. С. Somewhat effective; very ineffective. d. Very effective; very effective. e. Very effective; somewhat ineffective.

If desired investment spending is relatively sensitive to changes in interest rates, then in reducing expenditure monetary policy could be very useful because it would be during inflationary periods and in expanding expenditure during recessionary periods. a. Very ineffective; very ineffective. O b. Very ineffective; very effective. С. Somewhat effective; very ineffective. d. Very effective; very effective. e. Very effective; somewhat ineffective.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 8DQ

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An increase in the value of the simple multiplier can be caused by... O a. An increase in the net tax rate. O b. A decrease in the net tax rate. O c. An increase in the marginal propensity to save. O d. A decrease in the marginal propensity to consume. O e. An increase in the marginal propensity to import. Clear my choice
All of the following are true when there is an unplanned decrease in inventories, except: O a. Actual investment is greater than planned investment O b. Real GDP will be rising O c. GDP is less than aggregate expenditures O d. Saving is less than planned investment
An increase in interest rates shifts the Investment Demand curve up and increases Business Investment Expenditures. O True O False Households' autonomous savings is exactly the same as autonomous consumption. O True O False An increase in households' wealth will increase the marginal propensity to consume. O True O False Private-Sector Savings equal Consumption Expenditures at the Break-Even Disposable Income. True O False In National Income Accounting, an increase in unplanned inventory increases actual business investment expenditures (la). O True O False
In the Aggregate Expenditure framework, which of the following government policy choices offer a possible solution to inflationary pressures? (Check all that apply.) Select all that apply: O a. A reduction in taxes for businesses that increase investment. O b. A major decrease in what the government spends on healthcare. Oc. A decrease in military spending. O d. A tax increase on consumer income. The United States is Canada's major export market. Suppose there is a decrease in American real GDP. The impact of this change will be a in which will mean a shift in the Canadian AE function. As a result, Canadian real GDP will decrease consumption investment upward downward net exports increase
The Italian economy can be characterized by Equation 24.1l. EQUATION 24.1: C = 300 + 0.8Yd G = 400 T = 200 I = 200 Refer to Equation 24.1. At the equilibrium level of output in Italy, consumption equals. Lütfen birini seçin: O A. $3,400 O B. $3,250. O C $3,625 O D. $3,500. O E. $3,100
Aggregate planned expenditure decreases if O a. investment increases. O b. real GDP decreases. O c. exports increase. O d. government expenditure on goods and services increases. O e. autonomous consumption increases.
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When the general price level falls Select one: Oa.investment falls as a result of the real wealth effect. O b. investment falls as a result of the multiplier effect. Oc consumption rises as a result of the real wealth effect. Od.consumption decreases as a result of the multiplier effect
When the general price level falls Select one: a. investment falls as a result of the real wealth effect. O b.investment falls as a result of the multiplier effect. O c. consumption decreases as a result of the multiplier effect. O d. consumption rises as a result of the real wealth effect.
Now consider an economy in which the government lowers its spending. In the long run, the result would be in real output. in the price level and O no change, a decrease O an increase, an increase O a decrease; a decrease O None of the listed options is correct. O a decrease, no change
If output is less than planned aggregate expenditure, there will be Lütfen birini seçin: O A. an unplanned increase in inventories O B. a planned decrease in inventories. O C. no change in inventories O D. a planned increase in inventories O E. an unplanned decrease in inventories
Following the Keynesian cross, if there is a sudden tidal wave of investment, then it must be true that: a. Total output will not change at all in the short run because of the crowding out effect. O b. The planned expenditure line becomes steeper than the 45-degree line. Planned spending will be larger than income at the existing output level; inventories will be depleted fast, and producers must step up production. O d. The planned expenditure line becomes steeper than the 45-degree line.