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Social Studies
12th -
University
AP Macro Aggregate Expenditures Model
12 questions
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- 1. Multiple ChoiceWhat is the basic idea of the aggregate expenditures model?Amount of goods and services produced depends on agricultureAmount of goods and services sold depends on expendituresAmount of goods and services, as well as employment level depend on total spendingEmployment level has no impact on the aggregate expenditures
- 2. Multiple Choice
Businesses will only produce...
What they are absolutely sure they will profit on
What they think can sell at a profit
What the consumers have a shortage of
Whatever will appeal to the young folks
- 3. Multiple Choice
Which is the equation used to find the equilibrium GDP?
C+Ig=GDP
G+D+P=GDP
C-Ig=GDP
C-Ig=GPD
- 4. Multiple Choice
Which one is a constant in the aggregate expenditure function?
Consumption
Investment
GDP
None of the above
- 5. Multiple Choice
When aggregate expenditures rise, total output and employment...
increase
decrease
stay constant
rise and fall
- 6. Multiple Choice
What does an investment schedule graph look like?
- 7. Multiple Choice
Aggregate expenditures is to GDP as planned investment is to _______.
disequilibrium
GDP
consumption
saving
- 8. Multiple Choice
What effect does investment have on the income-expenditures stream?
Injections of spending increase total output.
These leakages decrease total output.
Investment is constant so it doesn't matter.
- 9. Multiple Choice
What effect does saving have on income-expenditures?
Saving increases total output because of inflation.
Saving is a leakage or withdrawal that decreases total output
Money that is saved isn't used so it doesn't have an effect
- 10. Multiple Choice
In total spending, investment often replaces losses that were due to...
wars
Blair Walsh
unplanned changes in inventories
saving
- 11. Multiple Choice
Why is the line at an angle of 45 degrees?
It's easy that way
Because at any point on the line, the x and y values are equal
Because $45,000,000 divided by $1,000,0000 equals 45
Because it means that at any point on the line, GDP is greater than aggregate expenditures.
- 12. Multiple Choice
In the graph above, the slope of the aggregate expenditure schedule:
Is constant and equals the MPS
Is constant and equals the MPC
Increases as real GDP increases
Increases as real GDP decreases
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