Exam 22: The Is Curve

If the consumption function is C = 20 + 0.5YD,then an increase in disposable income by $100 will result in an increase in consumer expenditure by ________.

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

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

If Canadian university students decide that drinking Mexican-brewed beer helps one get noticed,net exports will tend to fall,causing aggregate demand to ________ and the ________ curve to shift to the left,everything else held constant.

Aggregate output is ________ related to autonomous consumer expenditure,and is ________ related to planned investment spending.

When interest rates fall in the United States (with the price level fixed),the value of the dollar ________,domestic goods become ________ expensive,and net exports ________.

If young business professionals in Canada suddenly decide that driving German-made cars is an important status symbol,net exports will tend to ________ causing aggregate demand to ________,everything else held constant.

If aggregate demand equals output,________.

There are two types of investment: ________ investment-the spending by business firms on equipment and structures,and planned spending on residential houses-and ________ investment-spending by business firms on additional holdings of raw materials,parts,and finished goods.

When the interest rate rises,________.

A shift in tastes toward foreign goods ________ net exports in Canada and causes the IS curve to shift to the ________ in Canada everything else held constant.

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

Everything else held constant,a shift in tastes in Canada towards Canadian goods will ________ net exports in Canada and cause the quantity of aggregate output demanded to ________ in Mexico.

If aggregate demand is less than the level of aggregate output,then ________ inventory investment will be ________.

If actual output is less than equilibrium output,firms will ________ output to keep from ________ inventories.

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

Aggregate output is increased by a decrease in ________.

A decrease in interest rates ________.

If aggregate demand falls short of current output,business firms will ________ production to ________ inventories.

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