During a recession, output declines result in A) lower unemployment in the economy. B) higher unemployment in the economy. C) no impact on the unemployment in the economy. D) higher wages for the workers. ANSWER B
Date: September 10th, 2020
You are given the following information on the various sectors of the economy. Derive the aggregate expenditure function. C = 100 + 0.75Y I = 200 + 0.20Y G = 500 X = 250 M = 100 + 0.10Y ANSWER E = C + I + G + X – M E = (100 […]
Date: September 10th, 2020
If the possibility of a default increases because corporations begin to suffer losses, then the default risk on corporate bonds will ________, and the bonds’ returns will become ________ uncertain, meaning that the expected return on these bonds will decrease, everything else held constant. A) increase; less B) increase; more C) decrease; less D) decrease; […]
Date: September 10th, 2020
If a corporation begins to suffer large losses, then the default risk on the corporate bond will A) increase and the bond’s return will become more uncertain, meaning the expected return on the corporate bond will fall. B) increase and the bond’s return will become less uncertain, meaning the expected return on the corporate bond […]
Date: September 10th, 2020
Autonomous aggregate expenditures increases by $100 million, the marginal propensity to consume is 0.60, marginal propensity to invest is 0.20, and the marginal propensity to import is 0.10. Calculate the change in income. What will be an ideal response? ANSWER Δ Autonomous Expenditures × 1/[1-(marginal propensity to consume + marginal propensity to invest – […]
Date: September 10th, 2020
In the foreign exchange market, a balance of payments deficit is represented by: A) excess supply of dollars. B) excess demand for dollars. C) equilibrium in the foreign exchange market. D) none of the above. ANSWER A
Date: September 10th, 2020
Other things being equal, an increase in the default risk of corporate bonds shifts the demand curve for corporate bonds to the ________ and the demand curve for Treasury bonds to the ________. A) right; right B) right; left C) left; right D) left; left ANSWER C
Date: September 10th, 2020
What factors will shift the aggregate expenditure function for a given level of real domestic income? What will be an ideal response? ANSWER Any factors embedded in the autonomous spending components from the different sectors. Increases in personal taxes, real interest rate, consumer debt, business taxes, and the currency exchange rate will decrease aggregate […]
Date: September 10th, 2020
When price is greater than the market equilibrium price, a shortage is created. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The total sum of squares is 400 and the sum of squares errors is 100, what is the coefficient of determination? A) 25 B) 0.75 C) 1.00 D) 0 ANSWER B
Date: September 10th, 2020
