1.The aggregate expenditure model focuses on the relationship between ________ and ________ in the short run, assuming ________ is constant. A) total income; real GDP; the price level B) total production; total income; real GDP C) total spending; real GDP; the price level D) total spending; real GDP; total income
2.In 2001, Cisco Systems was surprised by a decline in demand for their equipment, resulting in an unexpected increase in inventories. This event resulted from A) aggregate expenditure that was less than GDP. B) aggregate expenditure that was greater than GDP. C) spending that was greater production. D) macroeconomic equilibrium. 3.
The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by A) government spending. B) the level of aggregate expenditure. C) export spending. D) investment spending. 4.
Which of the following is not one of the four main categories of spending identified by John Maynard Keynes? A) government purchases B) transfer payments C) consumption D) planned investment 5.
A decrease in consumer confidence can put your job at risk if A) consumers expect firms to increase investment in the future. B) aggregate expenditures rise. C) aggregate expenditures fall. D) consumers expect their incomes to rise in the future. 6.
During the Great Depression, economists first began studying the relationship between A) changes in GDP and changes in interest rates B) changes in nominal GDP and changes in real GDP C) changes in aggregate expenditures and changes in GDP D) changes in stock prices and changes in price controls 7.Household spending on goods and services is known as A) net exports.