Exam 22: The Is Curve

A tax cut initially ________.

The Bank of Canada increases interest rates when they want to reduce aggregate demand to fight inflation.How do increases in the interest rate reduce aggregate demand?

In the simple Keynesian framework,declines in planned investment spending that produce high unemployment can be offset by raising ________.

A decline in taxes ________ consumer expenditure and shifts the ________ curve to the ________,everything else held constant.

How is Keynes's consumption function defined? describe the terms used in this function?

If aggregated demand is less than actual output,unplanned inventory ________ will cause output to ________.

A tax increase ________ disposable income,________ consumption expenditure,and shifts the IS curve to the ________,everything else held constant.

A decline in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________,everything else held constant.

In the Keynesian framework,as long as output is ________ the equilibrium level,unplanned inventory investment will remain ________ and firms will continue to raise production.

Using the information contained in Situation 20-1,if autonomous consumption increases by $100,then equilibrium aggregate output will change by ________.

Describe Keynes's equilibrium condition and what it implies.

A shift in tastes toward American goods ________ net exports in Canada.and causes the quantity of aggregate output demanded to ________ in Canada,everything else held constant.

The IS curve shifts to the left when ________.

The ________ traces out the points for which total quantity of goods produced equals total quantity of goods demanded.

Keynes believed that changes in autonomous spending were dominated by unstable fluctuations in ________,which are influenced by emotional waves of optimism and pessimism-factors he referred to as "animal spirits."

A decrease in unplanned inventory investment for the entire economy equals the excess of ________.

Everything else held constant,if consumption expenditure falls by 160 when disposable income falls by 200,the mpc is ________.

Using the information in situation 20-2,if government spending increases by $100,then the equilibrium aggregate output will change by ________.

A decline in autonomous consumer expenditure causes the aggregate demand function to shift ________,the equilibrium level of aggregate output to fall,and the IS curve to shift to the ________,everything else held constant.

An autonomous depreciation of the Canadian dollar makes Canadian goods ________ relative to foreign goods and results in a ________ in Canadian net exports,everything else held constant.