#1
Which of the following is a component of aggregate expenditure?
Government spending
Consumer saving
Imports
All of the above
#2
What is the relationship between consumption and disposable income?
They have a direct relationship
They have an inverse relationship
There is no relationship between them
It depends on government policies
#3
What is the formula to calculate aggregate expenditure in an economy?
Consumption + Investment + Government Spending + Net Exports
Consumption + Saving + Government Spending + Net Exports
Consumption + Investment + Taxes + Net Exports
Consumption + Investment + Government Spending - Net Exports
#4
Which of the following is a component of net exports in the calculation of aggregate expenditure?
Imports
Exports
Government spending
Investment
#5
What does the term 'aggregate expenditure' represent in macroeconomics?
Total income earned by households
Total spending in the economy on final goods and services
Total savings in the economy
Total investment made by firms
#6
Which of the following is not considered a component of investment in the context of aggregate expenditure?
Business spending on new equipment
Household spending on new homes
Changes in inventories
Government spending on infrastructure
#7
What does the term 'autonomous consumption' refer to?
Consumption that is not influenced by income levels
Consumption that is solely determined by government policies
Consumption that varies with changes in income
Consumption that is only done by households
#8
In the context of aggregate expenditure, what is the multiplier effect?
The effect of changes in consumer confidence on overall spending
The process by which initial changes in spending lead to further changes in income and consumption
The effect of changes in government spending on investment decisions
The relationship between interest rates and investment spending
#9
Which of the following is an example of an exogenous factor affecting aggregate expenditure?
Consumer income
Business investment decisions
Government fiscal policy
International trade agreements
#10
According to the consumption function, what does the marginal propensity to consume (MPC) represent?
The percentage of income that is saved
The percentage of additional income that is consumed
The percentage of income that is taxed
The percentage of income that is spent on imports
#11
What is the main determinant of investment spending in the economy?
Interest rates
Consumer confidence
Government policies
Disposable income
#12
How does an increase in government spending affect aggregate expenditure and equilibrium GDP in the short run, according to the Keynesian model?
It increases aggregate expenditure and equilibrium GDP
It decreases aggregate expenditure but increases equilibrium GDP
It decreases both aggregate expenditure and equilibrium GDP
It has no effect on either aggregate expenditure or equilibrium GDP
#13
What effect does a decrease in taxes have on aggregate expenditure and equilibrium GDP in the Keynesian model?
It decreases aggregate expenditure and equilibrium GDP
It increases aggregate expenditure and equilibrium GDP
It decreases aggregate expenditure but increases equilibrium GDP
It has no effect on either aggregate expenditure or equilibrium GDP
#14
What happens to aggregate expenditure when planned investment exceeds saving in the economy?
Aggregate expenditure decreases
Aggregate expenditure increases
Aggregate expenditure remains unchanged
Aggregate expenditure becomes negative
#15
How does an increase in the value of the domestic currency affect net exports?
Net exports increase
Net exports decrease
Net exports remain unchanged
It depends on other factors
#16
What is the impact of an increase in government borrowing on interest rates in the economy?
Interest rates increase
Interest rates decrease
Interest rates remain unchanged
It depends on other factors
#17
Which of the following is true about the aggregate expenditure function?
It is always linear.
It does not vary with changes in income.
It intersects the 45-degree line at the equilibrium level of income.
It represents only consumption spending.