The slope of the aggregate expenditure line is
a. less than zero
b. less than 1.0
c. equal to 1.0
d. greater than 1.0
e. the same as the slope of the 45-degree line
B
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If an economy is growing at 2 percent a year but its rate of technology growth is 1 percent a year, then this country must be:
a. below its steady state level of capital per worker. b. expected to grow slower in the future. c. has a savings rate that is too low. d. none of the above.
Suppose in 2003, President Bush and the Congress made consumer credit harder to obtain. This would have the effect of
a. shifting the investment curve up b. shifting the investment curve down c. shifting the consumption curve up d. shifting the consumption curve down e. increasing the level of investment
In a simple, private economy, suppose that the MPC is .8 and investment rises by $20 million. At the new equilibrium, how much will saving have increased?
a. $8 million b. $16 million c. $20 million d. $80 million e. $100 million
Based on the diagram, if potential output equals 5,000 and the real interest rate is 1 percent, then there is ________ gap and the Fed must ________ the real interest rate so that output will equal potential output. 
A. an expansionary; raise B. an expansionary; reduce C. a recessionary; raise D. a recessionary; reduce