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Aggregate Demand in Economics Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Susan's income last year was $100,000, but it is $105,000 this year. Last year she spent $95,000, but this year she spent $98,000. What's her MPC?

Question 2 2. James has a marginal propensity to consume of 0.75. What does this mean?

Question 3 3. _____ argued that consumption was largely a function of income level.

Question 4 4. What is the calculation for net exports?

Question 5 5. If the net exports amount is positive, what does that mean?

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Question 6 6. What is one benefit of importing and exporting products globally?

Question 7 7. If $100 of new private investment gets added to the economy, and the marginal propensity to consume is 0.80, by how much will aggregate demand increase?

Question 8 8. How is a person's likelihood to save related to the simple spending multiplier?

Question 9 9. How does the multiplier effect resemble a ripple effect through the economy?

Question 10 10. What is a recessionary gap?

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Question 11 11. What happens in an economic recession?

Question 12 12. Which of these is a reason for a recessionary gap?

Question 13 13. When an inflationary gap exists, the economy is _____.

Question 14 14. In an economy the total demand for all final goods and services is called what?

Question 15 15. When aggregate demand outpaces aggregate supply during full employment, we have _____.

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Question 16 16. What does 'MPC' stand for?

Question 17 17. What is the formula for marginal propensity to save?

Question 18 18. What do we call the portion of extra income that is saved?

Question 19 19. Which one of the following is not one of the reasons that a shift may take place in aggregate demand?

Question 20 20. What is aggregate demand?

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Question 21 21. What how does the aggregate demand curve slope?

Question 22 22. Which of the following subjects is not addressed by the survey given to calculate the Consumer Confidence Index?

Question 23 23. What impact would an increase in consumer confidence have on aggregate demand?

Question 24 24. What organization releases the Consumer Confidence Index?

Question 25 25. Which of the following statements regarding full employment GDP is FALSE?

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Question 26 26. Why is unemployment not equal to zero at the full employment level of output?

Question 27 27. What is the non-accelerating inflation rate of unemployment?

Question 28 28. According to Keynes, which of the following is a big determinant of the level of consumption in an economy?

Question 29 29. What is net exports?

Question 30 30. Assume that the marginal propensity to save is 0.1. What is the maximum amount that real GDP could change if net exports increase by $15 billion?

Aggregate Demand in Economics Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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