Exam 12: Aggregate Expenditure and Output in the Short Run

Figure 12-2 -Refer to Figure 12-2.Suppose that the level of GDP associated with point K is potential GDP.If the U.S.economy is currently at point N,then

A decrease in the price level in the United States will have what effect on the aggregate expenditure line?

If inflation in the United States is lower than inflation in other countries,what will be the effect on net exports for the United States?

What are inventories? What usually happens to inventories at the beginning of a recession,and what usually happens to inventories at the beginning of an expansion?

________ usually increase(s)when the U.S.economy is in a recession and decrease(s)when the U.S.economy is expanding.

An increase in the price level in the United States will reduce U.S.imports and increase U.S.exports.

The ratio of the increase in ________ to the increase in ________ is called the multiplier.

What impact does a higher price level have on interest rates,wealth,and investment spending?

Net exports usually ________ when the U.S.economy is in a recession and ________ when the U.S.economy is expanding.

What is the difference between aggregate expenditure and aggregate demand?

Explain how a stock market crash has the potential to lead to a recession in an economy.

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

The formula for the multiplier is (1 - MPC).

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

If the marginal propensity to save is 0.4,the multiplier is 2.5.

What is the main reason for changes in GDP in the short run?

At macroeconomic equilibrium

If firms find that consumers are purchasing less than expected,which of the following would you expect?

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

Intel is the world's largest semiconductor manufacturer and a major supplier of the microprocessors and memory chips found in most personal computers.During the recession of 2007-2009,Intel's revenues ________ and it ________ the size of its workforce.