Exam 8: Aggregate Expenditure and Output in the Short Run

Discuss the leading causes of the Great Depression.Use the 45-degree line diagram to show how they caused a decline in GDP.

When aggregate expenditure is more than GDP, which of the following is true?

If the MPC is 0.5, then a $10 million increase in disposable income will increase consumption by

If consumption is defined as C = 2,400 + 0.9Y, then the marginal propensity to consume is 0.9.

Assume that inventories declined by more than analysts predicted.This implies that

Examples of assets that are included in ________ would be stocks, bonds, and savings accounts.

If planned aggregate expenditure is less than total production,

In a small economy in 2017, aggregate expenditure was $800 million while GDP that year was $850 million.Which of the following can explain the difference between aggregate expenditure and GDP that year?

On the 45-degree line diagram, for points that lie above the 45-degree line,

The larger the MPC, the smaller the value of the multiplier.

Consumption is $5 billion, planned investment spending is $8 billion, government purchases are $10 billion, and net exports are equal to $2 billion.If GDP during that same time period is equal to $27 billion, what unplanned changes in inventories occurred?

If the consumption function is defined as C = 7,250 + 0.8Y, what is the multiplier?

Investment spending increases during ________, and decreases during ________.

Figure 8.3 Alt text for Figure 8.3: In figure 8.3, a graph comparing real GDP and real aggregate expenditure. Long description for Figure 8.3: The x-axis is labelled, real GDP, Y (trillions of 2002 dollars).The y-axis is labelled, real aggregate expenditure, AE (trillions of 2002 dollars).Line Y = AE, originates at the vertex and slopes up to the top right corner.Line AE1, begins a little less than half way along the x-axis and slopes up to the end of the x-axis.Both these lines intersect at point K, approximately 3 quarters of the way along both lines.Point J is plotted a little less than half way along line AE1, to the left of point K.Point L is marked close to the right end of the line AE1, to the right of point K. -Refer to Figure 8.3.At point J in the figure above, which of the following is true?

Table 8.7 -Refer to Table 8.7.Given the consumption schedule in the table above, the marginal propensity to consume is

If planned investment is greater than actual investment, then aggregate expenditure is less than GDP.

Given Table 8.6 below, fill in the values of the marginal propensity to save (MPS)and the marginal propensity to consume (MPC).Show that MPC + MPS = 1. Table 8.6

If the MPC is 0.95, then a $10 million increase in disposable income will

In the aggregate expenditure model, ________ has both an autonomous component and an induced component.

As a result of the oil price, revenues at many ________Tim Hortons locations ________, and it ________ the size of its workforce.