ECON
Refer to the diagram, which applies to a private closed economy. If aggregate expenditures are C + Ig2, the amount of saving at income level J is
A. LK.
B. KN.
KD.
JD.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
23.
Refer to the diagram, which applies to a private closed economy. If gross investment is Ig1, the equilibrium GDP and the level of consumption will be
H and HB, respectively.
J and JI, respectively.
J and JK, respectively.
D. H and HF, respectively.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
Other things equal, the slope of the aggregate expenditures schedule will increase as a result of
a decline in the size of the inflationary gap.
B. an increase in the MPC.
an increase in the MPS.
a decline in the general price level.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
In a private closed economy, when aggregate expenditures equal GDP,
consumption equals investment.
consumption equals aggregate expenditures.
C. planned investment equals saving.
D. disposable income equals consumption minus saving.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
In a private closed economy, when aggregate expenditures exceed GDP,
GDP will decline.
business inventories will rise.
saving will decline.
D. business inventories will fall.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
If an unintended increase in business inventories occurs at some level of GDP, then GDP
entails a rate of aggregate expenditures in excess of the rate of aggregate production.
may be either above or below the equilibrium output.
is too low for equilibrium.
D. is too high for equilibrium.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
The equilibrium level of GDP is associated with
an excess of planned investment over saving.
B. no unintended changes in inventories.
an unintended decrease in business inventories.
an unintended increase in business inventories.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
29.
Which aggregate expenditure schedule AE in the diagram for a private closed economy implies the largest MPC, assuming investment is the same at each level of income?
A. AE4
AE3
AE2
AE1
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
30.
Which two aggregate expenditure schedules AE in the diagram for a private closed economy have the same MPC, assuming investment is the same at each level of income?
A. AE1 and AE2
AE2 and AE3
AE1 and AE4
AE3 and AE4
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
31.
Which aggregate expenditure schedule(s) AE in the diagram for a private closed economy represent(s) the highest level of investment, assuming investment is the same at each level of income and the level of consumption at zero income is the same for each schedule?
A. AE4 only
B. AE2 and AE3
AE1 and AE4
AE3 and AE4.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
If at some level of GDP the economy is experiencing an unintended decrease in inventories,
the aggregate level of saving will decline.
the price level will fall.
the business sector will lay off workers.
D. domestic output will increase.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
If an unintended increase in business inventories occurs,
we can expect aggregate production to be unaffected.
we can expect businesses to increase the level of production.
C. we can expect businesses to lower the level of production.
D. aggregate expenditures must exceed the domestic output.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
Assume that in a private closed economy, consumption is $240 billion and investment is $50 billion, both at the $280 billion level of domestic output. Thus,
saving is $10 billion.
B. unplanned decreases in inventories of $10 billion will occur.
the MPC is 0.80.
unplanned increases in inventories of $10 billion will occur.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
A private closed economy will expand when
actual GDP is less than potential GDP.
B. unplanned decreases in inventories occur.
aggregate expenditures are less than GDP.
unplanned increases in inventories occur.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
If aggregate expenditures exceed GDP in a private closed economy,
leakages will exceed injections.
B. planned investment will exceed saving.
unplanned investment in inventories will occur.
saving will exceed planned investment.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
For a private closed economy, an unintended decline in inventories suggests that
aggregate expenditures are less than the business sector expected them to be.
B. aggregate expenditures exceed production.
actual investment exceeds saving.
planned investment is greater than consumption.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
38.
Refer to the diagram for a private closed economy. The equilibrium GDP is
A. $60 billion.
B. $180 billion.
between $60 and $180 billion.
$60 billion at all levels of GDP.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
39.
Refer to the diagram for a private closed economy. In this economy, investment
decreases as GDP increases.
increases as GDP increases.
C. is $40 billion at all levels of GDP.
D. is $60 billion at all levels of GDP.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
40.
Refer to the diagram for a private closed economy. In this economy, aggregate expenditures
do not change as GDP increases.
increase by $2 for every $5 increase in GDP.
increase by $2 for every $4 increase in GDP.
D. increase by $2 for every $3 increase in GDP.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
41.
Refer to the diagram for a private closed economy. Aggregate saving in this economy will be zero when
C + Ig cuts the 45-degree line.
GDP is $180 billion.
C. GDP is $60 billion.
D. GDP is also zero.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
42.
(Advanced analysis) The given equations describe consumption and investment (in billions of dollars) for a private closed economy.
C = 60 + 0.6Y I = I0 = 30
In this economy, the equilibrium level of income (Y) is
A. 360.
B. 225.
C. 200.
D. 135.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
43.
(Advanced analysis) The given equations describe consumption and investment (in billions of dollars) for a private closed economy.
C = 60 + 0.6Y I = I0 = 30
In equilibrium, the level of consumption spending will be
A. 170.
B. 270.
C. 160.
D. 195.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
44.
(Advanced analysis) The given equations describe consumption and investment (in billions of dollars) for a private closed economy.
C = 60 + 0.6Y I = I0 = 30
In equilibrium, the level of saving will be
A. 30.
B. 26.
C. 25.
D. 60.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
45.
(Advanced analysis) The tables gives data for a private closed economy. The letters Y, C, S, and I are used to represent real GDP, consumption, saving, and investment, respectively. The equation representing the consumption schedule for the economy is
A. C = Y −0.6S.
B. Y = C + S.
C. C = 60 + 0.4Y.
D. C = 60 + 0.6Y.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Table
46.
(Advanced analysis) The tables gives data for a private closed economy. The letters Y, C, S, and I are used to represent real GDP, consumption, saving, and investment, respectively. The equation representing the investment schedule for the economy is
A. I = 0.3Y.
B. I = 80 −0.3Y. C. I = 30 + 0.1Y. D. I = I0 = 30.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Table
47.
(Advanced analysis) The tables gives data for a private closed economy. The letters Y, C, S, and I are used to represent real GDP, consumption, saving, and investment, respectively. Equilibrium Y (= GDP) is
A. $100. B. $200. C. $300. D. $400.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Table
When investment remains the same at each level of GDP in a private closed economy, the slope of the aggregate expenditures schedule
exceeds the MPC.
is less than the MPC.
equals the MPS.
D. equals the MPC.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Actual investment is $62 billion at an equilibrium output level of $620 billion in a private closed economy. The average propensity to save at this level of output is
A. 0.10.
B. 10.0.
C. 0.62.
D. 0.84.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
50.
Refer to the diagram for a private closed economy. The MPC and MPS are
0.6 and 0.4, respectively.
0.7 and 0.3, respectively.
C. both 0.5.
D. both 0.7.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
51.
Refer to the diagram for a private closed economy. Gross investment
is positively related to the level of GDP.
is negatively related to the level of GDP.
C. is independent of the level of GDP.
D. must be subtracted from consumption to determine aggregate expenditures.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
52.
Refer to the diagram for a private closed economy. At the $200 level of GDP,
A. consumption is $200 and planned investment is $50, so aggregate expenditures are $250.
consumption is $200 and planned investment is $100, so aggregate expenditures are $300.
consumption is $250 and actual investment is $50, so aggregate expenditures are $300.
aggregate expenditures fall short of GDP, with the result that GDP will decline.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
53.
Refer to the diagram for a private closed economy. At the $400 level of GDP,
aggregate expenditures exceed GDP, with the result that GDP will rise.
consumption is $350 and planned investment is zero, so aggregate expenditures are $350.
C. consumption is $300 and planned investment is $50, so aggregate expenditures are $350.
D. consumption is $300 and actual investment is $100, so aggregate expenditures are $400.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
54.
Refer to the diagram for a private closed economy. At the $300 level of GDP,
A. aggregate expenditures and GDP are equal.
consumption is $200 and planned investment is $50.
saving exceeds planned investment.
consumption plus saving is $400.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
55.
Refer to the diagram for a private closed economy. At the equilibrium level of GDP, the APC and APS
A. are 5/6 and 1/6, respectively.
are equal to the MPC and MPS, respectively.
are 4/5 and 1/5, respectively.
cannot be determined from the information given.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-03 Illustrate how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economys equilibrium level of output where the total quantity of goods produced equals the total quantity of goods purchased.
Test Bank: I Topic: Equilibrium GDP: C Ig = GDP
Type: Graph
If unintended increases in business inventories occur, we can expect
a decline in GDP and rising unemployment.
inflation.
an increase in consumption.
an offsetting increase in planned investment.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
57.
(Advanced analysis) The equations refer to a private closed economy, where Ig is gross investment, S is saving, and Y is gross domestic product (GDP). The equilibrium GDP will be
A. $160. B. $400. C. $360. D. $480.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
58.
(Advanced analysis) The equations refer to a private closed economy, where Ig is gross investment, S is saving, and Y is gross domestic product (GDP). In equilibrium, consumption will be
A. $400. B. $280. C. $320. D. $360.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
59.
(Advanced analysis) The equations refer to a private closed economy, where Ig is gross investment, S is saving, and Y is gross domestic product (GDP). In equilibrium, saving will be
A. $40. B. $120. C. $60.
D. $80.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
60.
(Advanced analysis) The equations refer to a private closed economy, where S is saving, Ig is gross investment, i is the real interest rate, and Y is GDP. If the real interest rate is 5 (percent), investment will be
A. $10 and the equilibrium GDP will be $75.
$15 and the equilibrium GDP will be $100.
$10 and the equilibrium GDP will be $120.
$15 and the equilibrium GDP will be $180.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
61.
(Advanced analysis) The equations refer to a private closed economy, where S is saving, Ig is gross investment, i is the real interest rate, and Y is GDP. In equilibrium, the level of saving will be
A. $10.
B. $15.
C. $20.
D. $30.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
62.
(Advanced analysis) The equations refer to a private closed economy, where S is saving, Ig is gross investment, i is the real interest rate, and Y is GDP. In equilibrium, the level of consumption will be
A. $80.
B. $95.
C. $65.
D. $70.
AACSB: Knowledge Application
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
In a private closed economy, investment is equal to saving at all levels of GDP and equilibrium occurs only at that level of GDP where investment is equal to saving.
planned; actual
B. actual; planned
gross; net
net; gross
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.
Test Bank: I Topic: Other Features of Equilibrium GDP
(Advanced analysis) If S = -60 + 0.25Y and Ig = 60, where S is saving, Ig is gross investment, and Y is gross domestic product (GDP), then the equilibrium level of GDP is A. $200.
B. $320. C. $360. D. $480.
AACSB: Knowledge Application Accessibility: Keyboard Navigation
Blooms: Understand Difficulty: 02 Medium
Learning Objective: 11-04 Discuss the two other ways to characterize the equilibrium level of real GDP in a private closed economy: saving = investment, and no unplanned changes in inventories.