True or False Questions: Recessionary Expenditure Gap- Aggregate expenditures by

Question

True or False Questions:

Recessionary Expenditure Gap- Aggregate expenditures by which aggregate expenditures at the full employment GDP falls short of those required to achieve full employment GDP.

Private Closed Economy- An economy that includes consumer, business and government segments of the economy.

Lump sum taxes- A tax of a constant amount so the government obtains the same amount of tax at each level of GDP.

Aggregate Supply schedule- A relationship between a nations price level and the amount of real domestic output that business produce.

Real Rate of Interest effect- The Nominal Rate of Interest earned on a project.

Savings- savings are planned investments by the consumer.

Wealth effect- The dollar amount of all the assets owned minus the dollar amount of all the liabilities or debt.

Savings Schedule- GDP less investment = savings

Aggregate Demand Schedule- a schedule that shows the amount of a nations output (real GDP) that buyers desire to purchase at each price level.

Producivity- The measure of the nations level of real output and the amount of resources used to produce the output, less labor cost.

Multiplier effect- Measures the change in GDP to spending.

Injection- Investment by private business into the economy for capital goods is and injection into the economy.

Consumption schedule- The measurement of Disposable income less savings.

Explanation / Answer

(1) The statement is True. Recessionary Expenditure Gap- Aggregate expenditures by which aggregate expenditures at the full employment GDP falls short of those required to achieve full employment GDP.

(2) The statement is False. Private Closed Economy- An economy that includes consumer, business and government segments of the economy.

(3) The statement is True. Lump sum taxes- A tax of a constant amount so the government obtains the same amount of tax at each level of GDP.

(4) The statement is True. Aggregate Supply schedule- A relationship between a nations price level and the amount of real domestic output that business produce.

(5) The statement is False. Real Rate of Interest effect- The Nominal Rate of Interest earned on a project.

(6) The statement is False. Savings- savings are planned investments by the consumer.

(7) The statement is True. Wealth effect- The dollar amount of all the assets owned minus the dollar amount of all the liabilities or debt.

(8) The statement is False. Savings Schedule- GDP less investment = savings

(9) The statement is True. Aggregate Demand Schedule- a schedule that shows the amount of a nations output (real GDP) that buyers desire to purchase at each price level.

(10) The statement is True. Producivity- The measure of the nations level of real output and the amount of resources used to produce the output, less labor cost.

(11) The statement is True. Multiplier effect- Measures the change in GDP to spending.

(12) The statement is True. Injection- Investment by private business into the economy for capital goods is and injection into the economy.

(13) The statement is True. Consumption schedule- The measurement of Disposable income less savings.

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