#1
Which component is not a part of Aggregate Expenditure?
Consumer Spending
Government Spending
Net Exports
Stock Market Investments
#2
The concept of 'fiscal policy' primarily involves which of the following?
Central bank's management of interest rates and money supply
Government's use of taxation and spending to influence the economy
Businesses' investment in technology and infrastructure
Consumer decisions about saving and spending
#3
Which of the following best describes the term 'aggregate supply'?
The total product output produced by firms within the economy
The total amount of goods and services demanded by consumers
The total investments made by the government
The total exports minus the total imports
#4
What does the Marginal Propensity to Consume (MPC) indicate?
The proportion of income saved
The proportion of income taxed
The proportion of total income
The proportion of income spent
#5
In the Keynesian cross model, what condition represents equilibrium in the goods market?
Aggregate expenditure equals aggregate supply
Aggregate expenditure is less than aggregate supply
Aggregate expenditure is greater than aggregate supply
None of the above
#6
Which of the following would shift the Aggregate Demand curve to the right?
A decrease in consumer wealth
An increase in taxes
An increase in government spending
A decrease in the money supply
#7
What role does investment play in the Aggregate Expenditure model?
It is inversely related to the interest rate
It is directly related to consumer spending
It has no impact on aggregate expenditure
It is only influenced by government policies
#8
How does an increase in net exports affect the Aggregate Demand curve?
Shifts it to the left
Shifts it to the right
Does not affect it
Rotates it upwards
#9
In macroeconomics, autonomous expenditure is best described as
Spending that depends on the level of income
Spending that does not depend on the level of income
The sum of all taxes collected by the government
Expenditure by firms on capital goods
#10
The multiplier effect in macroeconomics refers to the phenomenon where
an initial change in spending leads to a larger change in national income.
a change in taxes has no effect on the national income.
an increase in savings reduces the national income.
government spending decreases the national income.
#11
What is the significance of the equilibrium level of income in the context of the Aggregate Expenditure model?
It is the level at which aggregate supply exceeds aggregate demand
It represents the income level at which all earnings are saved
It is the income level where aggregate expenditure equals aggregate output
It signifies the point where inflation starts to decrease
#12
In the context of macroeconomics, what does the term 'liquidity trap' refer to?
A situation where interest rates are high and savings exceed investment
A condition where inflation rates are uncontrollably high
A situation where interest rates are low and monetary policy becomes ineffective
A scenario where the government cannot borrow or spend due to high debt levels
#13
What is the economic principle behind the 'crowding-out effect'?
Increased government spending leads to increased private sector investment
Increased government borrowing leads to higher interest rates and reduced private investment
Increased taxes lead to increased government spending
Increased private investment leads to decreased government spending
#14
In macroeconomic terms, the natural rate of unemployment is composed of
Only cyclical unemployment
Only frictional unemployment
Frictional and structural unemployment
Cyclical, frictional, and structural unemployment
#15
What does the term 'fiscal multiplier' refer to?
The ratio of a change in national income to the change in government spending that causes it
The rate at which government spending leads to an increase in total fiscal revenue
The proportion of income that is taxed by the government
The multiplier effect of increasing taxes on national income