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Column F
Column A
Column B
Column C
Column D
Column E
100
100
100
100
100
100
200
200
200
200
200
200
300
300
300
300
300
300
400
400
400
400
400
400
500
500
500
500
500
500
A 100
Draw the regular D and S graph.
Draw a dot showing a decrease in P and a decrease
in Q
Figure out what could have caused that by drawing
in the lines. Decrease in demand and no change in
supply
A 100
A 200
If the budget deficit increases—(more
spending than taxes in a given year) it
will increase the gov.’s demand for
loans. If the gov., increases demand for
loans, IR will increase.
A 200
1.
Suppose that in an economy with lumpsum (disregard) taxes, autonomous
(disregard) investment spending increases
by $10 million. If the marginal propensity
to consume is 0.8, equilibrium gross
domestic product will change by a
maximum of:
2.
New scenario, taxes decrease by the same
amount assuming the same MPC
A 300
1.
Spending multiplier: 1/MPS
1/.2=5
5 * positive 10 million= 50 million increase
2.
Tax multiplier: -MPC/MPS
-.8/.2= -4
-4 * negative (decrease) $10 million= 40 million
increase
A 300
A 400
A-D will increase the productivity of labor. Just
because the labor force increases does not
necessarily mean that they will be more
productive. However, all A-E would shift the
PPC outward and the LRAS to the right. Why?
They are all an increase in resources.
A 400
A 500
MPC is the change in spending
brought by a change in income. If
income increases by 10,000 and the
MPC is point .8, then consumption
will increase by 8,000
A 500
B 100
Most of you know that inside is inefficient
or unemployment, on the line is
(productively efficient, and outside is
currently unattainable. Missed on last
test—only one point of the curve
represents the best mix of goods.
B 100
B 200
If set at a balanced budget at full
employment, then—deficit during
recession (more spending, less taxes)
and surplus during inflation
B 200
B 300
C
B 300
B 400
If a decrease in exports, the AD
will decrease. Find a FISCAL
POLICY that will increase AD.-B
B 400
B 500
C
B 500
C 100
D
C 100
C 200
E
C 200
C 300
Best answer is C. Choice A
could increase economic
growth b/c an increase in
population is an increase in
resources, but would
probably not increase per
capita RGDP, which is the
best measure of the standard
of living.
C 300
DAILY
Place A Wager
DOUBLE
C 400
C 400
B
C 400
C 500
MPC is .9
Then, MPS is .1
Gov spending increases by
$100, but exports decrease by
$60. So, $40 injection.
1/.1=10
10 x 40=400--B
C 500
D 100
A
D 100
D 200
C
D 200
D 300
D
D 300
D 400
B
D 400
D 500
Down the Phillips
Curve=decrease in AD
B
D 500
E 100
E
Talk about LRAS, LRPC, and
PPC
E 100
E 200
Correct Response Two E
E 200
Question Number Three E
E 300
B
E 300
Question Number Four E
E 400
SRAS decreases--A
E 400
E 500
A
E 500
F 100
D
F 100
F 200
C
F 200
Draw crowding out.
1.
Show an economy in a recession in one color.
2.
After expansionary fp, what happens to AD/
3.
Due to expansionary FP, what happens to the
budget?
4.
Draw the loanable funds graph. What happens as a
result of #3. What happened to the RIR?
5.
What will happen to interest-sensitive consumption
spending and businesses’ purchase of capital goods
(AD)?
6.
What will happen to long-run growth?
F 300
F 300
1. Draw an economy in full employment equilibrium.
2. Businesses’ inflationary expectations increase. What
happens to SRAS?
3. What happened to inflation?
4. What happened to REAL wages? Take note--In the
SR—nominal wages stay the same (unless other wise
stated).
5. After #2, show the change in the Phillips Curve
F 400
F 400
1. Does unanticipated inflation help net creditors or net
debtors? EXPLAIN.
Net—after subtracting EX. My husband and I owe
$100,000 on our student loans and $140,000 on our
house. If we have $10,000 in savings (our saving are
loaned out to others), then we are NET DEBTORS by
$230,000.
F 500
F 500
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