Exam 10: Aggregate Expenditure and Aggregate Demand

Suppose that a pair of graphs represents a situation in which the aggregate expenditure line has shifted but the aggregate demand curve has not. The shift of the aggregate expenditure line was caused by a change in

A decrease in autonomous investment will

Exhibit 10-1 -In Exhibit 10-1, which of the variables are autonomous?

If the marginal propensity to save is 1/8, the value of the simple multiplier is

An increase in the price level can be indicated by a downward shift of the aggregate expenditure line.

The simple multiplier

Exhibit 10-7 -Assume the United States' aggregate expenditure line started at AE(1) in Exhibit 10-7. When the real estate market crashed, its aggregate expenditure would have changed to

If the mps is 0.25, the simple multiplier is

The larger the marginal propensity to save, other things constant,

Which of the following is illustrated by the distance between the aggregate expenditure line and the 45-degree line at each level of real GDP?

An increase in the price level will

Exhibit 10-1 -In Exhibit 10-1, the marginal propensity to consume equals

Suppose that planned investment increases by $200 billion and that the marginal propensity to consume equals 0.80. The aggregate expenditure line will shift upward by __________ at every level of real GDP.

If households save $30 billion more at each level of income and the MPC = 0.9, the aggregate expenditure line will

If autonomous investment increases by $100 billion, equilibrium real GDP demanded will

Exhibit 10-2 -In Exhibit 10-2, which group of the following is considered autonomous with respect to income?

If output exceeds planned aggregate spending, the result is unintended inventory increases.

A decrease in the price level will

Which of the following is true about the relationship between the aggregate demand curve and the aggregate expenditure line?

A change in consumers' expectations about the future will shift both the aggregate expenditure curve and the aggregate demand curve.