A cost system determines the cost of a cost object by ________.
A) accumulating and then assigning costs
B) accumulating costs
C) assigning and then accumulating costs
D) assigning costs
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Briefly discuss the relationship between leakages and the size of the multiplier.
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Decrease in government spending will ________ the expenditure curve:
A) decrease.
B) increase.
C) not change.
D) none of the above.
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The change in import spending due to a change in domestic real income is called:
A) marginal propensity to save.
B) marginal propensity to consume.
C) marginal propensity to import.
D) none of the above.
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The total amount of spending on nonresidential structures, equipment, software, residential structures, and business inventories in a given period of time is called:
A) net exports.
B) government consumption and investment.
C) gross private domestic investment.
D) personal consumption.
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The marginal propensity to consume is 0.75, marginal propensity to invest is 0.3, and the marginal propensity to import is 0.2. What is the size of the multiplier?
A) 6.67
B) 5.67
C) 4.67
D) 1.67
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Government expenditures are considered autonomous in the model meaning that changes are the result of:
A) changes in real income.
B) changes in inflation.
C) changes in unemployment.
D) changes in policy decisions.
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Increases in autonomous spending have an expansionary effect and make ________ levels of real income consistent with a given interest rate.
A) lower
B) higher
C) constant
D) none of the above.
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________ investment is more volatile than other forms of investment spending because this type of investment can be changed relatively quickly.
A) Business fixed
B) Inventory
C) Residential
D) Capital
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Increase in capacity utilization will ________ the expenditure curve:
A) decrease.
B) increase.
C) not change.
D) none of the above.
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