Exam 3: Income and Interest Rates: the Keynesian Cross Model and the Is Curve

Figure 3-2 -Refer to the information above.What is the level of consumption when the level of income equals 2000?

Suppose a = 50,c = 0.8,and T = 410.How much is saved out of a total income of 1230?

If Ep is 2500 and Y is 3000,then

In a country without foreign trade and no income taxes,if the government increases autonomous taxes by 1000 and the MPS is 0.1,then the initial or first round change in expenditures by all tax payers will be

Figure 3-4 -In Figure 3-4 above,the shift from AP₀ to AP₁ could have been caused by a rise in net exports of

The inauguration of a new President often increases the degree of optimism in business firms and households,causing Ap to

Which of these variables remains exogenous throughout Chapter 3?

The "equilibrating mechanism," the reason the economy tends toward equilibrium in the simple Keynesian model,is primarily

Changes in consumer confidence,business optimism,government spending,and foreign events that cause economic volatility are known as

Figure 3-2 -Refer to the information above.If the level of production in the economy equals 3000,the amount of saving equals ________ and the level of unintended inventory investment equals ________.

What type of variables have their movements explained by theory?

A fixed or rigid price level implies

Figure 3-4 -In Figure 3-4 above,the shift from AP₀ to AP₁ could have been caused by a ________ in T of ________.

When planned autonomous spending rises,the planned expenditure line

A marginal propensity to consume of 0.84 results in a multiplier of

In the 2000s,low savings rates are attributed to

If autonomous planned spending increases by $1 million and s = 0.2 and t = 0.1,then equilibrium income increases by

Figure 3-7 -In Figure 3-7 above,the multiplier effect does NOT explain

Figure 3-7 -In Figure 3-7 above,the multiplier is

In equilibrium,with exports equal to imports it must be the case that