Unit 3 Review

Quiz
•
Social Studies
•
12th Grade
•
Hard
Ben Slaton
FREE Resource
28 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Imagine John and Batman receive a bonus of $1000 each. If Batman decides to spend $800 of his bonus, what does the $800 represent for Batman?
The percentage of the bonus that is invested
The percentage of the bonus that is spent
The percentage of the bonus that is saved
The percentage of the bonus that is taxed
Answer explanation
The marginal propensity to consume is the percentage of new income that is spent, not saved, invested, or taxed.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Imagine a government decides to increase spending on infrastructure by $1 billion. Chase and Atkins are discussing what the spending multiplier formula calculates in this scenario. What is it?
The change in consumer spending habits
The total savings in an economy
The impact of this new spending on GDP
The total amount of taxes collected
Answer explanation
The spending multiplier formula calculates the impact of new spending on GDP, showing how much the initial spending increases total economic output.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Imagine a government decides to increase spending in the economy. Henry and Cook are discussing the formula to calculate the total impact of this spending on the economy's output. What formula would they use?
1 divided by 1 plus the marginal propensity to save
1 divided by 1 minus the marginal propensity to consume
1 divided by the marginal propensity to save
1 divided by the marginal propensity to consume
Answer explanation
The correct formula for the spending multiplier is 1 divided by 1 minus the marginal propensity to consume, as it takes into account the portion of income that is not spent.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Imagine an economy experiencing a decrease in aggregate demand. Mrs. Shaw, an economist, suggests exploring the reasons behind this downward trend. What could be these reasons?
The inflation effect, interest rate effect, and wealth effect
The net export effect, inflation effect, and interest rate effect
The wealth effect, productivity effect, and net export effect
The wealth effect, interest rate effect, and net export effect
Answer explanation
The downward sloping aggregate demand curve is caused by the wealth effect, interest rate effect, and net export effect.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Imagine a country is experiencing a recession. Which of the following are likely to shift its aggregate demand curve to the right, potentially leading to economic recovery?
Consider this scenario as discussed by Phoenix and Waylon in their economics project.
Consumer spending, gross investment, government purchases, and net exports
Taxes, subsidies, government purchases, and exports
Consumer savings, gross investment, taxes, and imports
Wages, productivity, inflation expectations, and net exports
Answer explanation
The correct answer is consumer spending, gross investment, government purchases, and net exports as they are the aggregate demand shifters.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Imagine a local bakery where Henry and Atkins are discussing. What does the short-run aggregate supply curve show in the context of this bakery?
The relationship between the price of bread and the quantity of bread produced in the long run
The relationship between the bakery's expectations of future bread prices and the quantity of bread produced
The direct relationship between the price of bread and the quantity of bread produced in the short run
The inverse relationship between the wages of bakery workers and the quantity of bread produced
Answer explanation
The short-run aggregate supply curve shows the direct relationship between price level and quantity of goods produced in the short run.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Imagine a country's economy is growing due to an increase in the efficiency of its factories, largely thanks to the innovative methods introduced by Henry and Phoenix. What does this scenario most likely cause in the short-run aggregate supply curve?
An increase in resource prices
Higher inflation expectations
A decrease in productivity
An increase in productivity
Answer explanation
An increase in productivity shifts the short-run aggregate supply curve to the right by allowing more goods and services to be produced at every price level.
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