Exam (elaborations)
AP Macroeconomics AD-AS Test with 100% correct Answers
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AP Macroeconomics AD-AS Test
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AP Macroeconomics AD/AS TestThe iimost iiimportant iideterminant iiof iiconsumption iiand iisaving iiis iithe ii- iiAnswers ii-level
iiof iiincome
With iian iiMPS iiof ii.4, iithe iiMPC iiwill iibe ii- iiAnswers ii-1.0 iiminus ii.4
The iiMPC iican iibe iidefined iias iithat iifraction iiof iia ii- iiAnswers ii-change iiin iiincome iithat
iiis iispent
As iidisposable iiincome iigoes iiup iithe ii- iiAnswers ii-APC iifalls
Which iiof iithe iifollowing iiis iicorrect?
-APC ii+ iiAPS ii=1
-APC ii+ iiMPS=1
-APS ii+MPC=1
-APS ii+ iiMPC=1 ii- iiAnswers ii-APC ii+ iiAPS ii=1
Suppose iia iifamily's iiconsumption iiexceeds iiits iidisposable iiincome. iiThis iimeans iithat
iiits ii- iiAnswers ii-APC iiis iigreater iithan ii1
In iithe iilate ii1990s iithe iiU.S. iiStock iimarket iiboomed, iicausing iiU.S. iiconsumption iito
iirise. iiEconomists iirefer iito iithis iioutcome iias iithe ii- iiAnswers ii-wealth iieffect
The iiinvestment iidemand iicurve iiportrays iian iiinverse ii(negative) iirelationship iibetween
ii- iiAnswers ii-the iireal iiinterest iirate iiand iiinvestment
A iidecline iiin iithe iireal iiinterest iirate iiwill ii- iiAnswers ii-increase iithe iiamount iiof
iiinvestment iispending
If iibusiness iitaxes iiare iireduced iiand iithe iireal iiinterest iirate iiincreases ii- iiAnswers ii-the
iilevel iiof iiinvestment iispending iiwill iinecessarily iiincrease
Other iithings iiequal, iia ii10 iipercent iidecrease iiin iicorporate iiincome iitaxes iiwill ii-
iiAnswers ii-shift iiin iithe iiinvestment-demand iicurve iito iithe iiright
The iiinvestment iidemand iicurve iiwill iishift iito iithe iiright iias iia iiresult iiof ii- iiAnswers ii-
technological iiprocess
, If iithe iiinflation iirate iiis ii10 iipercent iiand iithe iireal iiinterest iirate iiis ii12 iipercent, iithe
iinominal iiinterest iirate iiis ii- iiAnswers ii-22 iipercent
Investment iispending iiin iithe iiUnited iiStates iitend iito iibe iiunstable iibecause ii- iiAnswers
ii-expected iiprofits iiare iihighly iivariable
capital iigoods iiare iidurable
innovation iioccurs iiat iian iiirregular iipace
The iimultiplier iieffect iimeans iithat ii- iiAnswers ii-an iiincrease iiin iiinvestment iican iicause
iiGDP iito iichange iiby iia iilarger iiamount
The iimultiplier iiis ii- iiAnswers ii-1/MPS
If iithe iiMPC iiis ii.70 iiand iigross iiinvestment iiincreases iiby ii$3 iibillion, iithe iiequilibrium
iiGDP iiwill ii- iiAnswers ii-increase iiby ii10 iibillion
Assume iithe iiMPC iiis ii2/3. iiIf iiinvestment iispending iiincrease iiby ii$2 iibillion, iithe iilevel iiof
iiGDP iiwill iiincrease iiby ii- iiAnswers ii-6 iibillion
The iimultiplier iiapples iito ii- iiAnswers ii-investment, iinet iiexports, iiand iigovernment
iispending
The iiactual iimultiplier iieffect iiin iithe iiU.S. iiEconomy iiis iiless iithan iithe iimultiplier iieffect iiin
iithe iitext iiexamples iibecause ii- iiAnswers ii-in iiaddition iito iisaving, iihouseholds iiuse
iisome iiof iiany iiincrease iiin iiincome iito iibuy iiimported iigoods iiand iito iipay iiadditional
iitaxes
The iiaggregate iidemand iicurve iiis ii- iiAnswers ii-downsloping iibecause iiof iithe iiinterest
iirate, iireal iibalances, iiand iiforeign iipurchases iieffect
shows iithe iiamount iiof iireal iioutput iithat iiwill iibe iipurchased iiat iieach iipossible iiprice
iilevel ii- iiAnswers ii-The iiaggregate iidemand iicurve
The iiinterest-rate iieffect iisuggests iithat ii- iiAnswers ii-an iiincrease iiin iithe iiprice iilevel iiwill
iiincrease iithe iidemand iifor iimoney, iiincrease iiinterest iirates, iiand iidecrease
iiconsumption iiand iiinvestment iispending
If iithe iiprice iilevel iiincreases iiin iithe iiUnited iiStates iirelative iito iiforeign iicountries, iithen
iiAmerican iiconsumers iiwill iipurchase iimore iiforeign iigoods iiand iifewer iiU.S. iigoods.
iiThis iistatement iidescribes ii- iiAnswers ii-the iiforeign iipurchases ii(or iinet iiexport) iieffect
Which iione iiof iithe iifollowing iiwould iinot iishift iithe iiaggregate iidemand iicurve?
-a iichange iiin iithe iiprice iilevel
-depreciation iiof iithe iiinternational iivalue iiof iithe iidollar
- iia iidecline iiin iithe iiinterest iirate iiat iieach iipossible iiprice iilevel
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