Exam 10: Aggregate Demand I: Building the Is-Lm Model

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Consider the impact of an increase in thriftiness in the Keynesian-cross analysis. Assume that the marginal propensity to consume is unchanged, but the intercept of the consumption function is made smaller so that at every income level saving is greater. This will:

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Question 101

Suppose Congress decides to reduce the budget deficit by cutting government spending. Use the Keynesian-cross model to illustrate graphically the impact of a reduction in government purchases on the equilibrium level of income. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curve shifts; and v. the terminal equilibrium values. b. Explain in words what happens to equilibrium income as a result of the cut in government spending and the time horizon appropriate for this analysis.

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Question 102

In the Keynesian-cross model with a given MPC, the government-expenditure multiplier the tax multiplier.

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Question 103

In the Keynesian-cross model, actual expenditures equal:

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Question 104

Based on the Keynesian model, one reason to support spending increases over tax cuts as measures to increase output is that:

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Question 105

Showing 101 - 105 of 105

Consider the impact of an increase in thriftiness in the Keynesian-cross analysis. Assume that the marginal propensity to consume is unchanged, but the intercept of the consumption function is made smaller so that at every income level saving is greater. This will:

In the Keynesian-cross model with a given MPC, the government-expenditure multiplier the tax multiplier.

In the Keynesian-cross model, actual expenditures equal:

Based on the Keynesian model, one reason to support spending increases over tax cuts as measures to increase output is that:

The Science of Macroeconomics

The Data of Macroeconomics

National Income: Where It Comes From and Where It Goes

Money and Inflation

The Open Economy

Unemployment

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand II: Applying the Is-Lm Model

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

Stabilization Policy

Government Debt and Budget Deficits

Introduction to the Financial System

Asset Prices and Interest Rates

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