CON 2370 SAP SIMPLIFIED ACQUISITION PROCEDURES
EXAM LATEST REAL EXAM QUESTIONS AND WELL
ELABORATED ANSWERS (VERIFIED ANSWERS) A NEW
UPDATED VERSION LATEST | ALREADY GRADED A+
(NEW!!)
A movement along the aggregate demand curve is caused by a - ANSWER: a change
in the aggregate price level.
Which of the following will shift the AD curve to the right? - ANSWER: an increase in
wealth
As an inflationary gap is eliminated through self-correcting adjustment, the
equilibrium price level ________ and the equilibrium real output ________. -
ANSWER: increases; decreases
Use the "Aggregate Supply" Figure 18-2. At point F, potential output is: - ANSWER:
greater than actual output and unemployment is high.
When actual output is above potential output, in the absence of deliberate
monetary or fiscal policy: - ANSWER: nominal wages will increase, and the short-run
aggregate supply curve will shift to the left.
Suppose the government increases taxes by more than is necessary to close an
inflationary gap. Which of the following would most likely be the end result? -
ANSWER: The economy could move into a recession.
Suppose the government increases spending more than is necessary to close a
recessionary gap. Which of the following is likely to be the end result? - ANSWER:
The economy will experience inflation.
The multiplier effect of changes in government transfers is equal to - ANSWER:
MPC/(1 - MPC).
Suppose the economy is currently experiencing a recessionary gap. Which of the
following fiscal policy options is most likely to increase real GDP by the largest
amount? - ANSWER: an increase in government purchases
Assume that the MPC = 0.8 and the government increases spending by $100 billion,
financing this spending with a $100 billion tax increase. Which of the following will
be the likely effect of this action? - ANSWER: Real GDP will expand by $100 billion
Assume that marginal propensity to consume is 0.8, and potential output is $800
billion. The tax multiplier is: - ANSWER: .8/(1-.8)=4
EXAM LATEST REAL EXAM QUESTIONS AND WELL
ELABORATED ANSWERS (VERIFIED ANSWERS) A NEW
UPDATED VERSION LATEST | ALREADY GRADED A+
(NEW!!)
A movement along the aggregate demand curve is caused by a - ANSWER: a change
in the aggregate price level.
Which of the following will shift the AD curve to the right? - ANSWER: an increase in
wealth
As an inflationary gap is eliminated through self-correcting adjustment, the
equilibrium price level ________ and the equilibrium real output ________. -
ANSWER: increases; decreases
Use the "Aggregate Supply" Figure 18-2. At point F, potential output is: - ANSWER:
greater than actual output and unemployment is high.
When actual output is above potential output, in the absence of deliberate
monetary or fiscal policy: - ANSWER: nominal wages will increase, and the short-run
aggregate supply curve will shift to the left.
Suppose the government increases taxes by more than is necessary to close an
inflationary gap. Which of the following would most likely be the end result? -
ANSWER: The economy could move into a recession.
Suppose the government increases spending more than is necessary to close a
recessionary gap. Which of the following is likely to be the end result? - ANSWER:
The economy will experience inflation.
The multiplier effect of changes in government transfers is equal to - ANSWER:
MPC/(1 - MPC).
Suppose the economy is currently experiencing a recessionary gap. Which of the
following fiscal policy options is most likely to increase real GDP by the largest
amount? - ANSWER: an increase in government purchases
Assume that the MPC = 0.8 and the government increases spending by $100 billion,
financing this spending with a $100 billion tax increase. Which of the following will
be the likely effect of this action? - ANSWER: Real GDP will expand by $100 billion
Assume that marginal propensity to consume is 0.8, and potential output is $800
billion. The tax multiplier is: - ANSWER: .8/(1-.8)=4
