Exam 23: Aggregate Expenditure and Output in the Short Run

Which of the following will raise consumer expenditures?

Consumption spending is $5 million, planned investment spending is $8 million, actual investment spending is $8 million, government purchases are $10 million, and net export spending is $2 million. Based on this information, which of the following is true?

Article Summary Gains in consumer and business spending gave GDP a bigger boost than was forecast in the third quarter of 2017, growing at an annualized rate of 3 percent. Motor vehicle sales following the hurricanes that struck Texas and Florida are being credited for much of the gain in consumer spending, which grew at an annualized rate of 1.6 percent, and a steady job market, low inflation, and low interest rates are expected to sustain consumer spending. Residential investment remained weak, but nonresidential investment increased 3.9 percent. Government spending declined slightly, and after-tax income increased by 0.6 percent after being adjusted for inflation. -Refer to the Article Summary. The increase in GDP discussed in the article summary was due in part to increases in nonresidential investment. Increases in nonresidential investment will cause a(n) ________ the aggregate expenditure curve.

The Apple iPhone is sold in a box labeled "Made in China," but a study by economists at the Asian Development Bank found that the actual percentage of the price of the iPhone accounted for by the only work done in China, which is assembly, is

Figure 23-1 -Refer to Figure 23-1. According to the figure above, at what point is aggregate expenditure less than GDP?

Investment spending ________ during a recession, and ________ during an expansion.

From 1983-2017, net exports for the United States

If the MPC is 0.95, then a $10 million increase in disposable income will

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP, then

At macroeconomic equilibrium,

C = 2,550 + (MPC)Y I = 800 G = 1,100 NX = 50 If the equilibrium level of GDP is $11,250, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume.

The change in consumption divided by the change in disposable income is equal to

On the 45 degree line-diagram, for points that lie above the 45 degree line

At each of the three points in the following graph, indicate whether planned aggregate expenditure is greater than, equal to, or less than GDP?

An example of assets that are included in ________ would be stocks, bonds, and savings accounts.

________ describes the relationship between consumption spending and disposable income.

Given the equations for C, I, G, and NX below, what is the equilibrium level of GDP? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400

If an increase in autonomous consumption spending of $10 million results in a $50 million increase in equilibrium real GDP, then

Article Summary Gains in consumer and business spending gave GDP a bigger boost than was forecast in the third quarter of 2017, growing at an annualized rate of 3 percent. Motor vehicle sales following the hurricanes that struck Texas and Florida are being credited for much of the gain in consumer spending, which grew at an annualized rate of 1.6 percent, and a steady job market, low inflation, and low interest rates are expected to sustain consumer spending. Residential investment remained weak, but nonresidential investment increased 3.9 percent. Government spending declined slightly, and after-tax income increased by 0.6 percent after being adjusted for inflation. -Refer to the Article Summary. The increase in consumer spending discussed in the article summary was expected to be sustained due in part to a steady job market, and a slight increase in after-tax income. The increase in consumption resulting from the increase in disposable income will cause a(n) ________ the aggregate expenditure curve.

Consumption spending is $22 million, planned investment spending is $7 million, actual investment spending is $7 million, government purchases are $9 million, and net export spending is $3 million. Based on this information, which of the following is true?