Exam 12: Aggregate Expenditure and Output in the Short Run

Which of the following is a true statement about the multiplier?

An increase in the price level ________ real wealth,which causes consumption to ________.

An increase in the price level in the United States will have what effect on the aggregate expenditure line?

Consumption spending will ________ when disposable income ________.

The change in consumption divided by the change in disposable income is equal to

An increase in taxes will ________ consumption spending,and a decrease in transfer payments will ________ consumption spending.

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

Would a larger multiplier lead to longer and more severe recessions or shorter and less severe recessions? Briefly explain.

An increase in Social Security payments will

The difference between GDP and disposable income is

Which of the following is not one of the four main categories of spending identified by John Maynard Keynes?

If planned aggregate expenditure is above potential GDP and planned aggregate expenditure equals GDP,then

Consumption spending is $5 million,planned investment spending is $8 million,actual investment spending is $8 million,government purchases are $10 million,and net export spending is $2 million. Based on this information,which of the following is true?

If aggregate expenditure is greater than GDP,how will the economy reach macroeconomic equilibrium?

Actual investment spending includes spending by consumers on

If planned investment is equal to actual investment,then aggregate expenditure is equal to GDP.

Investment spending increases during ________,and decreases during ________.

If the multiplier is 10,the marginal propensity to consume must be 0.1.

Economists Atif Mian and Amir Sufi believe that the sharp decline in consumption spending in 2008 occurred because falling housing prices resulted in ________ and lower consumer borrowing to finance spending.

How does an increase in government spending affect the aggregate expenditure line?