Exam 9: Demand Side Equilibrium Unemployment Or Inflation

Assume a simple macroeconomic model.When inventories rise unexpectedly,

To avoid a coordination failure,the intentions of savers and investors must be both

The main examples of macroeconomic coordination failures are

Assume that the MPC is .75,and investment spending rises by $25 billion.How much will real GDP change?

In the income-expenditure model,at equilibrium GDP

The slope of the aggregate demand curve illustrates that as the price level rises,

In the real world,the actual multiplier is ____ the simplified multiplier.

A decrease in the price level causes a lower equilibrium quantity demanded.

The expenditure schedule and the aggregate demand curve show much the same thing,with one crucial difference-the price level.How does the price level affect the two schedules?

The concept that increases in spending cause larger increases in equilibrium GDP is known as the

If the amount that consumers wish to save at the full employment level of income is greater than the amount that businesses plan to invest,then

Figure 9-1 -In Figure 9-1,at $3,000 billion real GDP,

In the 2007-2009 period,the expenditure level in the United States intersected the 45-degree line below potential GDP,causing

If savings exceeds investment at full employment,demand will fall short of total output.

The federal government could stimulate investment spending by

Using the standard 45-degree line diagram,how does an increase in autonomous consumption effect the expenditure schedule?

Figure 9-4 -In Figure 9-4,if the economy faces an inflationary gap,what must happen to reach potential GDP?

When businesses are cutting back production,then it probably true that

When GDP decreases,consumption spending increases.

To eliminate a recessionary gap,the expenditure schedule should be