Exam 11: Aggregateexpenditures

The spending multiplier grows _______ as the marginal propensity to consume _______.

What is one solution for an economy stuck in a recessionary output gap?

If the government wishes to decrease GDP by $2,000 billion, and the MPC is 0.6, it should_______ its spending by _______ billion.

In the equation PAE = A + bY, autonomous sources of spending are captured by:

Wealth can be thought of as:

The effect of government spending or tax cuts on national income is measured by the:

Which of the following scenarios would cause investment to decrease?

Economist John Maynard Keynes noted that one of the main contributors to the Great Depression in the 1930s was:

The figure shows planned aggregate expenditure and output for an economy. If output in this economy is Y₂, we would expect there to be:

The marginal propensity to consume (MPC) is calculated as:

The equilibrium aggregate expenditure model:

In economics, investment refers to:

If the MPC is 0.9, and the government cuts spending by $200 billion, the overall effect on GDP will be:

If the domestic income of a nation's citizens increases, net exports will likely:

Economic environments that have lower levels of planned aggregate expenditure for a given level of output have:

Economic environments that have higher levels of planned aggregate expenditure for a given level of output have:

A _______ relationship exists between the real interest rate and investment spending.

What is the equation for aggregate expenditure?

If consumers increase their preference for foreign goods and services, imports will likely:

If the government wishes to increase GDP by $1,000 billion, and the MPC is 0.6, it should increase its spending by _______ billion.