Exam 8: Aggregate Expenditure and Output in the Short Run

Which of the following leads to a decrease in real GDP?

All of the following are true statements about the multiplier, except

If planned aggregate expenditure is greater than total production,

________ consumption is consumption that does not depend upon the level of GDP.

Aggregate expenditure includes consumption spending, unplanned investment spending, government purchases, and net exports.

If planned aggregate expenditure is below potential GDP and planned aggregate expenditure equals GDP, then

An increase in taxes will ________ consumption spending, and a decrease in transfer payments will ________ consumption spending.

Actual investment spending does not include

A decrease in consumer confidence can put your job at risk if

Which of the following leads to an increase real GDP?

When we graph consumption as a function of ________ rather than as a function of disposable income, the slope of this consumption function is ________.

Which is the largest component of aggregate expenditure?

When Jack's income increases by $5,000, he spends an additional $4,000 dollars.This implies that his marginal propensity to consume is 1.25.

If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP, then

During the Great Depression, economists first began studying the relationship between

If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years, then

Investment spending ________ during a recession, and ________ during an expansion.

Firms in a small economy planned that inventories would grow over the past year by $300,000.Over that year, inventories actually grew by $400,000.This implies that

On the 45-degree line diagram, the 45-degree line shows points where real aggregate expenditure equals

If planned aggregate expenditure is less than real GDP, some firms will experience unplanned increases in inventories.