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Econ 231 - Exam 2 - Chapters 8 & 9 - Practice Problems || Questions and 100% Verified Answers.
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Which of the following changes results from a decrease in an economy's disposable income? A rightward shift of the consumption function An upward movement along the consumption function A leftward shift of the consumption function A downward movement along the consumption function correct ans...

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  • August 16, 2024
  • 14
  • 2024/2025
  • Exam (elaborations)
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Econ 231 - Exam 2 - Chapters 8 & 9 - Practice Problems ||
Questions and 100% Verified Answers.
Which of the following changes results from a decrease in an economy's disposable income?

A rightward shift of the consumption function
An upward movement along the consumption function
A leftward shift of the consumption function
A downward movement along the consumption function correct answers A downward
movement along the consumption function

Which of the following is considered a leakage in the circular flow model?

Business spending
Total exports
Investment spending
Household saving correct answers Household saving

Identify the correct statement among the following statements.

Total sales equal total demand.
Total demand equals total production.
Total sales equal total income.
Total production equals total income. correct answers Total production equals total income.

Refer to the figure below. A decrease in disposable income causes a movement from point



P to S.
Q to T.
T to Q.
P to Q. correct answers T to Q.

A recessionary gap can be caused by

high price levels.
low interest rates.
firms who spend more than they earn.
consumers who spend more than they earn correct answers high price levels.

Disposable income minus consumer spending equals

investment.
household savings.

, transfer payments.
taxes. correct answers household savings.

Which of the following results if total spending in an economy exceeds its total output?

The price level in the economy increases.
The inventory levels in the economy increase.
The price level in the economy remains constant.
The inventory levels in the economy remain constant correct answers The price level in the
economy increases.

Refer to the figure below. A decrease in the prices of stocks listed on NASDAQ causes a
movement from point



P to R.
Q to T.
T to S.
P to Q correct answers P to R.

Which of the following transactions would not be included when measuring U.S. aggregate
demand?

A new McDonald's is built in your neighborhood.
The local Honda dealership sells three Japanese-made cars.
Your neighbor buys a new boat.
The government sells health insurance policies. correct answers The local Honda dealership sells
three Japanese-made cars.

The multiplier's effect can be hindered by

the marginal propensity to consume.
international trade.
consumption and investment spending.
government debt. correct answers international trade.

Refer to the figure below. A decrease in price level causes a movement from point



P to R.
Q to T.
T to Q.
P to S. correct answers P to S.

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