Easy
In which of the following situations for a private closed economy will the level of GDP expand?
when planned investment exceeds saving
If an unplanned increase in business inventories occurs:
we can expect businesses to lower the level of production.
Actual investment may be defined as:
planned plus unplanned investment.
Other things equal, if a change in the tastes of Canadian consumers causes them to purchase more foreign goods at each level of Canadian GDP:
Canadian GDP will fall.
At the equilibrium GDP for an open economy:
net exports may be either positive or negative.
Planned investment equals saving:
only at the equilibrium GDP.
If unplanned investment in business inventories occurs, we can expect:
a decline in GDP.
Actual investment equals saving:
at all levels of GDP.
If the multiplier in an economy is 5, a $20 billion increase in net exports will:
increase GDP by $100 billion.
If net exports are positive:
aggregate expenditures are greater at each level of GDP than when net exports are zero or negative.
Which of the following statements is correct for a private closed economy?
Saving equals planned investment only at the equilibrium level of domestic output.
What will be the effect of an excess of planned investment over saving in a private closed economy with unemployed resources?
a rise in the real GDP
Unplanned changes in inventories:
bring actual investment and saving into equality at all levels of GDP.
The marginal propensity to import is:
the change in imports divided by a change in GDP.
If net exports decrease from zero to some negative amount, the aggregate expenditures schedule would:
shift downward.
If an unplanned increase in business inventories occurs at some level of GDP, then GDP:
will decrease.
Planned plus unplanned investment equals:
actual investment.
Exports have the same macroeconomic effect on GDP as:
investment.
The open economy multiplier is:
smaller than the simple multiplier because the latter embodies fewer leakages.
If the dollar appreciates relative to foreign currencies, we would expect:
a country's net exports to fall.
If at some level of GDP the economy is experiencing an unplanned decrease in inventories:
domestic output will increase.
Saving is always equal to:
actual investment.
Imports have the same macroeconomic effect on GDP as:
saving.
If the equilibrium level of GDP in a private open economy is $1000 billion and consumption is $700 billion at that level of GDP, then:
Ig + Xn must equal $300 billion.
If a nation imposes tariffs and quotas on foreign products, the immediate effect, if no retaliation is immediately imposed by other countries will be to:
increase domestic output and employment.