Question 1

The ratio of the change in GDP to an initial change in aggregate expenditures (AE)is the:

Accepted Answer

A) spending multiplier. 
B) permanent income rate. 
C) marginal expenditure rate. 
D) marginal propensity to consume. 
A) spending multiplier. 
B) permanent income rate. 
C) marginal expenditure rate. 
D) marginal propensity to consume.

Question 2

Which of the following correctly describes the spending multiplier?

Accepted Answer

A) The initial change in consumption, investment, government spending, or net exports divided by the change in equilibrium GDP. 
B) An initial increase in aggregate expenditures divided by the equilibrium GDP. 
C) An initial increase in aggregate expenditures divided by the change in equilibrium GDP. 
D) The ratio of the change in real GDP to an initial change in any component of aggregate expenditures. 
A) The initial change in consumption, investment, government spending, or net exports divided by the change in equilibrium GDP. 
B) An initial increase in aggregate expenditures divided by the equilibrium GDP. 
C) An initial increase in aggregate expenditures divided by the change in equilibrium GDP. 
D) The ratio of the change in real GDP to an initial change in any component of aggregate expenditures.

The ratio of the change in GDP to an initial change in aggregate expenditures (AE)is the:

Which of the following correctly describes the spending multiplier?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters

Exam 9: The Keynesian Model in Action

The ratio of the change in GDP to an initial change in aggregate expenditures (AE)is the:

Which of the following correctly describes the spending multiplier?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters