1 The aggregate demand curve or schedule shows the relationship between the total demand for output and the Multiple Choice 6 points income level. eBook References . interest rate. price level. o O O O real GDP. 6 points cBook B References Which combination of factors would most likely increase aggregate demand? Multiple Choice o O O O an increase in household indebtedness and a decrease in net exports an increase in consumer wealth and a decrease in interest rates an increase in net exports and a decrease in government spending an increase in business taxes and a decrease in profit expectations Changes in the national incomes of our trading partners would directly affect our Multiple Choice 6 points g O consumption. =Book 0 References exports. government spending. O O imports. O 6 points cBook B References The short-run aggregate supply curve shows the Multiple Choice o O O O inverse relationship between the price level and real GDP purchased. inverse relationship between the price level and real GDP produced. direct relationship between the price level and real GDP produced. direct relationship between the price level and real GDP purchased. Use the following graph to answer the next question. 5 A 6 points Price Level 2 eBook References Real GDP Which line represents the long-run aggregate supply curve? Multiple Choice O O 2 O 3 O 46 AS 6 Price Level points AD2 AD, eBook YA Y1 Y2 Y3 References Real GDP If aggregate demand curve shifts from AD2 to AD,, the effect on real GDP will be a decrease from Multiple Choice Y3 to Y1. O Y2 to Y4 . O Y2 to Y1. O Y3 to Y4.7 If aggregate demand increases and aggregate supply decreases, the price level Multiple Choice points O will decrease, but real output may Increase, decrease, or remain unchanged. eBook References O will Increase, but real output may Increase, decrease, or remain unchanged. O and real output will both Increase. O and real output will both decrease.AS AS2 8 AS, Price Level Price Level AD 6 points Real GDP Real GDP (1) (2) Book AS AS Price Level Price Level References AD2 AD, AD, AD, Real GDP Real GDP (3) (4) Which of the diagrams best portrays the effects of a substantial reduction in government spending? Multiple Choice Graph (1) O Graph (2) O Graph (3) O Graph (4)AS, AS2 9 AS, Price Level Price Level AD 6 Real GDP Real GDP points (1) (2) AS AS Book Price Level Price Level References AD2 AD, AD, AD, Real GDP Real GDP (3) (4) Assuming the economy is initially at full employment, which of the diagrams best portrays a recession? Multiple Choice O Graphs (1) and (2) O Graphs (1) and (3) O Graphs (2) and (4) O Graphs (3) and (4)10 6 points eBook References In which of the following sets of circumstances can we confidently expect inflation? Multiple Cholce O O O O Aggregate supply and aggregate demand both increase. Aggregate supply and aggregate demand both decrease. Aggregate supply decreases and aggregate demand Increases. Aggregate supply Increases and aggregate demand decreases. The table below shows labor Income for four Individuals and the amount each has paid In income taxes. 11 Labor Income, Tax Pald, and Average Tax Rate Labor Income Tax Paid Average Tax Rate Individual (dollars) (dollars) (percent) Samantha $45,000 $9, 090 6 Charles 68,000 10, 200 points Amanda 80,000 9, 600 Young 125, 000 12, 500 Instructions: Enter your answers as a whole number. eBook a. Complete the table above by calculating the average tax rate paid by each Individual. References b. Is the income tax depicted here progressive, regressive, or proportional? O The income tax is regressive. O The Income tax is proportional. O The Income tax is progressive.The table below presents the tax revenue and spending for the government over five years. 12 a. Under the "Budget Amount" column calculate the annual budget outcome. Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. b. Under the "Budget" column determine whether the annual budget outcome is a budget surplus, budget deficit, or a balanced points budget. Government Revenue and Spending Tax Revenue Spending Budget Amount (billions of (billions of (billions of Year dollars) dollars) dollars) Budget eBook 1 $700 $600 $ [Click to select) 2 400 800 [Click to select) 3 200 500 [Click to select) References 4 100 100 (Click to select) un 400 300 [Click to select) a. Under the "Budget Amount" column calculate the annual budget outcome. b. Under the "Budget" column determine whether the annual budget outcome is a budget surplus, budget deficit, or a balanced budget.13 6 points References The table below presents the tax revenue and spending for the government over five years. Government Revenue and Spending Tax Revenue Spending Budget Amount (billions of (billions of (billions of Year dollars) dollars) dollars) Budget [+ | s | sw [ s | | [Closska] Instructlons: Enter your answer as a whole number. If you are entering a negative number Include a minus sign. a. Under the "Budget Amount\" column calculate the annual budget outcome. b. Under the "Budget\" column determine whether the annual budget outcome Is a budget surplus, budget deficit, or a balanced budget. c. Suppose the government has no debt entering into year 1. At the end of year 5, what Is the government's level of debt? Enter your answer as a positive value. 3 billion 14 Which one of the following is not a major source of funds for the U.S. federal government? Multiple Choice 6 points O Payroll taxes eBook References O Proprietary Income O Borrowing O General sales taxesA budget surplus means that 15 Multiple Choice 6 points O government expenditures are greater than revenues in a given year. eBook References O government revenues are greater than expenditures in a given year. O a nation's exports are greater than its Imports. O a nation's Imports are greater than its exports