Exam 31: The Aggregate Expenditures Model

In which of the following situations for an open mixed economy will the level of GDP contract?

Exports have the same effect on the current size of GDP as

In a closed private economy, an unplanned decrease in inventories will cause firms to increase real GDP.

A decrease in taxes will have a larger effect on equilibrium GDP if the marginal propensity to consume is smaller.

In the private closed economy, equilibrium GDP occurs where C + Ig = GDP.

Refer to the accompanying table.If an additional lump-sum tax of $20 were imposed, we would expect

Equal increases in government purchases and taxes will

In the aggregate expenditures model, it is assumed that investment

If the economy has a recessionary expenditure gap of $15 billion and the MPS is 0.3, then the equilibrium level of GDP is

A personal tax cut of $50 billion will affect income differently than an increase in government spending by $50 billion because

In the United States from 1929 to 1933, real GDP and the unemployment rate _.

A tax cut will have a greater effect on equilibrium GDP if the

Suppose that a mixed open economy is producing at its equilibrium income and that net exports are zero.If at the equilibrium income the public sector's budget shows a surplus,

If the marginal propensity to consume is 0.9 in a private closed economy, a $20 billion decline in investment spending will decrease

What is the likely result from a depreciation of a nation's currency when its economy is already operating at its full-employment level of output?

An upward shift of the aggregate expenditures schedule might be caused by

In the aggregate-expenditures model, the average price level is

Other things equal, if a change in the tastes of American consumers causes them to purchase more foreign goods at each level of U.S.GDP, then

If the expected rate of return on investment decreases, then most likely the

A private closed economy will expand when