Exam 14: Aggregate Expenditure Multiplier

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.Unplanned inventory changes are zero when real GDP equals

Aggregate expenditure is equal to

"Aggregate planned expenditure is the sum of planned consumption expenditure, investment, government expenditures on goods and services, and exports minus imports." Is the previous statement correct or incorrect?

A country reports that when real GDP is $3.0 trillion, aggregate planned expenditure is $4.0 trillion.When real GDP equals $3.0 trillion,

Equilibrium expenditure occurs when

Describe the relationship between aggregate planned expenditure, real GDP, and unplanned inventory changes.

-The above table presents data for the nation of Economica. a. What is the aggregate planned expenditure and unplanned inventory change at each level of real GDP? b. At what level of real GDP is equilibrium expenditure achieved?

If investment increases ,which of the following happens? i. aggregate expenditure increases ii. real GDP increases iii. consumption expenditure decreases

The slope of the AE curve is .80.What is the expenditure multiplier? Everything else the same, by how much does equilibrium aggregate expenditure increase if a. exports increase from $1.75 trillion to $2.25 trillion. b. government expenditure on goods and services decrease from $2.0 trillion to $1.8 trillion. c. investment increases from $1.2 trillion to $2.3 trillion.

Which aggregate expenditure categories are influenced by the level of real GDP?

The smaller the amount saved out of a change in disposable income, the

________ shifts the consumption function upward.

A movement along the AE curve arises from a change in ________ and a movement along the AD curve arises from a change in ________.

At the equilibrium level of aggregate expenditure, what does aggregate expenditure equal? What happens at other levels of real GDP to bring about an equilibrium?

When planned aggregate expenditure is larger than real GDP, actual inventories ________ planned inventories and real GDP ________.

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

-The figure above shows a nation's consumption function.If disposable income is $2 trillion, then the MPC is ________ and saving is ________.

In the midst of the Great Depression, President Roosevelt in a radio address to the nation encouraged everyone to "spend ourselves into prosperity." His advice reflected

The expenditure multiplier measures the change in

If real GDP ________ aggregate planned expenditure, then as a result firms ________ production.