Exam 12: Aggregate Expenditure and Output in the Short Run

Discuss the leading causes of the Great Depression.Use the 45-degree line diagram to show how they caused a decline in GDP.

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending,

If the marginal propensity to save is 0.25,then a $10,000 decrease in disposable income will

________ usually increase(s)when the U.S.economy is in a recession and decrease(s)when the U.S.economy is expanding.

An unplanned increase in inventories results from

A decrease in consumer confidence can put your job at risk if

If consumption is defined as C = 1,350 + 0.6Y,then the marginal propensity to consume is 0.6.

Figure 23-1 -Refer to Figure 23-1.At point L in the figure above,which of the following is true?

If economists forecast a decrease in aggregate expenditure,which of the following is likely to occur?

In the aggregate expenditure model,________ has both an autonomous component and an induced component.

If planned investment is greater than actual investment,then aggregate expenditure is less than GDP.

Household spending on goods and services is known as

When we graph consumption as a function of ________ rather than as a function of disposable income,the slope of this consumption function is ________.

The slope of the consumption function is equal to

On the 45-degree line diagram,for points that lie below the 45-degree line,

When net exports equal zero,the economy is in macroeconomic equilibrium.

Firms in a small economy planned that inventories would grow over the past year by $300,000.Over that year,inventories actually grew by $400,000.This implies that

Actual investment spending does not include

The aggregate demand curve shows the relationship between the price level and the level of planned aggregate expenditure in the economy.

If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP,then