19.
An MPS of 1/3 will allow a $1 billion change in intended government expenditures to change
equilibrium income by:
A. $0.4 billion
B. $0.6 billion
C. $1 billion
D. $1.67 billion
E. $3 billion
18.
"Exports Boost U.S. Industrial Capacity Usage." This news most likely represents:
A. Greater leakages
B. Smaller leakages
C. Greater injections
D. Smaller injections
17.
Suppose there were no investment and full-employment output were $300 billion then there would be:
A. A recessionary gap of $10 billion
B. An inflationary gap of $10 billion
C. Neither a recessionary nor an inflationary gap
D. None of the above
16.
If investment were raised from $10 billion to $20 billion, equilibrium output would rise by: (Hint: Take
into account the multiplier)
A. $10 billion per year
B. $20 billion per year
C. $100 billion per year
D. None of the above
15.
If there were no investment and full-employment output were $200 billion per year, then there would be:
A. Inventory depletion, prices would fall, and unemployment would rise
B. Inventory depletion, prices would rise, and unemployment would fall
C. Undesired inventories, prices would fall, and unemployment would rise
D. None of the above
14.
If full-employment output were $300 billion per year:
A. Desired spending would exceed output
B. Desired saving would exceed desired investment
C. Desired spending would equal output
D. None of the above