1)Consider the following economy: C=150+0.5(Y-T), T=100, G=200, I=50. What is the multiplier for government expenditure of the economy?

1. 0.5
2. 1
3. 1.5
4. 2

2) Consider the following economy: C=150+0.5(Y-T), T=100, G=200, I=50. If taxes decrease from 100 to 0, what will be the new equilibrium level of income?

1. 600
2. 700
3. 800
4. 1000

3) Consider the following economy: C=150+0.5(Y-T), T=100, G=200, I=50. How much should government expenditure increase for the equilibrium level of income to increase to 2000.

1. 650
2. 750
3. 950
4. 1050

4) Consider the following economy: C=150+0.5(V-T), T=100, G=200, I=50. What is the equilibrium level of income?

1. 600
2. 700
3. 800
4. 1000

5) Consider the following economy: C=150+0.5(Y-T), T=100, G=200, I=50. If G, government expenditure increased from 200 to 300 what would be the new equilibrium level of income, Y

1. 600
2. 700
3. 800
4. 900

6) Consider the following economy: C=150+0.5(Y-T), T=100, G=200, I=50. What is the tax multiplier of the economy?

1. 0.5
2. 1
3. 1.5
4. 2

7) In recessions, tax revenues collected by government tend to____, automatic stabilizers (unemployment benefits...) tend to______ and budget deficit (G-T) tends to_______

1. Increase, decrease, decrease
2. Decrease, increase, increase
3. Decrease, increase, decrease
4. Increase, increase, increase

8)Consider the following economy: C=150+0.5(Y-T), T=100, G=200, I=50. If the production is at level Y=800, which of the following is correct?

1. Unplanned inventories -50,production should increase
2. Unplanned inventories +50,production should increase
3. Unplanned inventories -50,production should decrease
4. Unplanned inventories +50,production should decrease