Exam 14: Aggregate Expenditure Multiplier

Disposable income (trillions of 2005 dollars) Consumption expenditure (trillions of 2005 dollars) 0.0 1.5 2.0 3.0 4.0 4.5 6.0 6.0 8.0 7.5 -The above table has data from the nation of Media.Based on these data, the marginal propensity to consume is

Which of the following situations lead firms to increase production?

-The figure above shows a nation's consumption function.The amount of autonomous consumption expenditure is

The figure above shows three different consumption functions for a nation. -Which of the following events could result in the consumption function shifting from CF₀ to CF₁?

The expenditure multiplier equals 5 and there is a $3 million increase in investment.Equilibrium expenditure

The multiplier effect

The marginal propensity to consume is

If the MPC is 0.6 and there are no imports or income taxes, the expenditure multiplier is

Exports decrease by $500 billion, investment increases by $300 billion, and government expenditure increases by $200 billion. As a result, autonomous expenditures ________ , total expenditures ________ , and equilibrium real GDP ________.

When the economy enters an expansion of a business cycle, households become more optimistic about future disposable income.The increase in optimism leads to

The expenditure multiplier explains how a change in

-The above table contains information about the nation of Syldavia.There are no income taxes or imports in this nation.The equilibrium expenditure is

The MPC is 0.90 and there are no income taxes or imports.If government expenditures on goods and services increases by $2.0 billion, after the multiplier effect works out, aggregate expenditure increases by

In the aggregate expenditure (AE) model, when real GDP exceeds aggregate planned expenditure, actual inventories ________ planned inventories and real GDP ________.

When aggregate planned expenditure is less than GDP,

According to John Maynard Keynes,

When aggregate planned expenditure exceeds real GDP, there are unplanned ________ in inventories, and firms ________ production, so that real GDP ________.

If real GDP exceeds aggregate planned expenditure, then the change in unplanned inventories is ________ and firms ________ production.

Real GDP, Y (billions of 2005 dollars) Consumption expenditure, C (billions of 2005 Investment, I Government expendithare, G (billions of 2005 (billions of 2005 dollars) dollars) 100 150 150 150 200 200 150 150 300 250 150 150 400 300 150 150 500 350 150 150 600 400 150 150 700 450 150 150 800 500 150 150 900 550 150 150 -The above table gives data for the nation of Mouseville.There are no imports into or exports from Mouseville.Aggregate planned expenditure is less than actual expenditure if real GDP is

________ can trigger a recession.