Exam 12: Aggregate Expenditure and Output in the Short Run

If the consumption function is defined as C = 7,250 + 0.8Y,what is the autonomous level of consumption expenditure?

Figure 23-2 -Refer to Figure 23-2.Suppose that the level of GDP associated with point K is potential GDP.If the U.S.economy is currently at point N,

Refer to Figure 23-3. Suppose that government spending increases,shifting up the aggregate expenditure line. GDP increases from GDP₁ to GDP₂,and this amount is $200 billion. If the MPC is 0.8,then what is the distance between N and L or by how much did government spending change?

The decrease in consumer spending during the 2007-2009 recession was due in part to falling home values.This reason for the decline in consumer spending is most closely related to which of the following variables that determine the level of consumption?

What are inventories? What usually happens to inventories at the beginning of a recession,and what usually happens to inventories at the beginning of an expansion?

Which of the following will increase aggregate expenditure in the United States?

Purchases of information processing equipment and software ________ during the 2007-2009 recession.

During the Great Depression,economists first began studying the relationship between

A stock market crash which causes stock prices to fall should cause

If the consumption function is defined as C = 7,250 + 0.8Y,what is the multiplier?

Autonomous expenditure is a type of expenditure that does not depend on

Consumption spending refers to ________ spending on goods and services.

Intel is the world's largest semiconductor manufacturer and a major supplier of the microprocessors and memory chips found in most personal computers.During the recession of 2007-2009,Intel's revenues ________ and it ________ the size of its workforce.

What is the main reason for changes in GDP in the short run?

If consumption is defined as C = 4,500 + 0.75Y,then the marginal propensity to save is 0.25.

The key idea of the aggregate expenditure model is that in any particular year,the level of ________ is determined mainly by the level of aggregate expenditure.

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

________ spending follows a smooth trend whereas,________ spending is more volatile and subject to fluctuations.

If the MPC is 0.95,then a $10 million increase in disposable income will

If the marginal propensity to consume is 0.6,the marginal propensity to save is