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If a nation imports less than it exports, then its net exports are
Question 1 options:
A) positive.
B) negative.
C) zero.
D) unstable.
Question 2 (1 point)
At the equilibrium level of real GDP, total production equals total
Question 2 options:
A) saving.
B) investment.
C) net exports.
D) spending.
Question 3 (1 point)
If aggregate expenditures are greater than aggregate output in the Keynesian model,
then firms will
Question 3 options:
A) earn below average profits.
B) have unplanned inventory depletion.
C) begin to layoff workers.
D) lower their prices.
Question 4 (1 point)
Suppose firms observe that their inventories are larger than expected. In the Keynesian model, how do firms respond to this unplanned inventory investment accumulation?
Question 4 options:
A) Firms will raise their prices.
B) Firms will increase their investment in capital goods.
C) Firms will expand exports sales and reduce domestic sales.
D) Firms will hire fewer workers and decrease their production.
Question 5 (1 point)
Which of the following would cause a downward shift of the aggregate
expenditures curve?
Question 5 options:
A) An increase in taxes.
B) An increase in investment.
C) An increase in consumption expenditures.
D) An increase in government spending.
Question 6 (1 point)
A $1 million increase in investment spending will raise equilibrium output and income (real GDP) by
Question 6 options:
A) less than $1 million.
B) exactly $1 million.
C) between $0.5 and $1.5 million.
D) more than $1 million.
Question 7 (1 point)
Which of the following might the government choose to increase in order to close an inflationary gap?
Question 7 options:
A) The money supply.
B) Taxes.
C) Transfer payments.
D) Government spending.
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