Exam 12: Aggregate Expenditure and Output in the Short Run

During a(n)________ many firms experience reduced profits,which reduces ________ and investment spending.

________ consumption is consumption that depends upon the level of GDP and ________ consumption is consumption that does not depend upon the level of GDP.

The marginal propensity to consume is defined as

Which of the following is true?

In a small economy in 2011,aggregate expenditure was $850 million while GDP that year was $800 million. Which of the following can explain the difference between aggregate expenditure and GDP that year?

Macroeconomic equilibrium occurs when

Consumption is $5 million,planned investment spending is $8 million,government purchases are $10 million,and net exports are equal to $2 million. If GDP during that same time period is equal to $23 million,what unplanned changes in inventories occurred?

At macroeconomic equilibrium,total ________ equals total ________.

A rising price level decreases consumption by decreasing the real value of household wealth.

What impact does an increase in the price level in the United States have on net exports and why?

If planned aggregate expenditure is greater than total production,

Firms in a small economy anticipated that inventories would grow over the past year by $750,000,and over that year,inventories grew by exactly $750,000. This implies that

If planned aggregate expenditure equals GDP,the economy is in macroeconomic equilibrium.

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