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

In the development of the IS curve,one variable that turns from exogenous to endogenous is

If Y = $200 billion,c = 0.75,autonomous consumption = $10 billion,and T = $20 billion,induced consumption expenditure is

Figure 3-2 -Employing the information in Figure 3-2 above,when real disposable income is 1000,savings from households would be ________ and the marginal propensity to save would be ________.

The size of the multiplier depends in part on the

Total planned expenditures are

A 45-degree line on a graph with expenditures,E,on the vertical axis and production,Y,on the horizontal axis,represents

When an economy is in equilibrium,

The saving function is

In our consumption function,when disposable income is zero,consumption is

Income on the horizontal axis at which the vertical distance to the 45-degree line is greater than the vertical distance to the Ep line gives rise to ________-than-equal planned expenditures,and so we must be ________ the equilibrium level of income.

Figure 3-7 -In Figure 3-7 above,the multiplier for a change in autonomous taxes is

If both autonomous imports and autonomous taxes decrease by $100B we expect that equilibrium income will

The slope of the planned expenditure line is

Higher real GDP growth usually causes

If the MPS is 0.1 and the income tax rate is 0.33 the multiplier,k,is approximately

Figure 3-5 -In Figure 3-5 above,the marginal propensity to save is

In economic models,variables taken as given and not explained by the model are called ________ variables.

The multiplier measures the

In 2005 real personal saving has decreased to ________ of personal disposable income.

When interest rate rise consumers will