1.In a linear consumption function where the slope is positive but less than one, what happens to consumption when income rises?
2.In a macroeconomic framework excluding government and international trade, what components make up aggregate demand?
3.Why is real GNP considered an imperfect indicator of a nation's well-being?
4.What does nominal GNP represent in terms of income measurement?
5.Which of the following are considered injections in the circular flow of income?
6.In economic terms, when a steel manufacturer supplies steel to an automobile manufacturer, how is the steel classified?
7.Which of the following are the main concerns addressed by macroeconomics?
8.What is the primary purpose of using purchasing power parity (PPP) exchange rates?
9.Real GDP is calculated by adjusting nominal GDP for changes in what factor?
10.Which components constitute total injections in an economy?
11.Which components are included solely in aggregate demand?
12.How is the duration of a business cycle typically determined?
13.Which of the following measures reflects the price index of all goods produced within a country's economy?
14.Which event led to the development of macroeconomic theory that highlighted Keynesian ideas and reduced emphasis on classical economics?
15.Which area of economics focuses on the overall performance and behavior of the entire economy?
16.What is the likely effect of a credible and announced monetary policy tightening if individuals form rational expectations?
17.Refer to Exhibit 6. If the economy is initially at long-run equilibrium at point E, which point will the economy move toward following an unanticipated monetary tightening?
18.Refer to Exhibit 6. If the economy is initially at long-run equilibrium at point E, what point will the economy move toward following a sudden rise in government expenditure?
19.Based on Exhibit 6, if individuals anticipate a 3% inflation rate and the actual inflation rate is also 3%, at which point is the economy functioning?
20.What is the effect of a reduction in the price of imported oil on the short-run Phillips curve?