Exam 12: Aggregate Expenditure and Output in the Short Run

The ________ illustrates the relationship between the price level and the quantity of planned aggregate expenditure,holding constant all other factors that affect aggregate expenditure.

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

The marginal propensity to consume measures the average amount of wealth that a consumer spends in a given period of time.

Examples of assets that are included in household wealth would be

The key idea of the aggregate expenditure model is that in any particular year,the level of GDP is determined mainly by

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

The consumption function describes the relationship between

If an increase in autonomous consumption spending of $10 million results in a $50 million increase in equilibrium real GDP,then

Table 12-11 -Refer to Table 12-11.Using the table above,calculate the unplanned change in inventories for each level of GDP,and explain what will happen to GDP.

During a(n)________ many firms experience increased profits,which increases ________ and investment spending.

Consumption spending is $5 million,planned investment spending is $8 million,unplanned investment spending is $2 million,government purchases are $10 million,and net export spending is $2 million.What is GDP?

The marginal propensity to consume is the slope of the consumption function.

If consumption is defined as C = 4,500 + 0.75Y,then the value of the marginal propensity to save is 0.25.

Consumption spending is $22 million,planned investment spending is $7 million,actual investment spending is $7 million,government purchases are $9 million,and net export spending is $3 million.Based on this information,which of the following is true?

Figure 12-1 -Refer to Figure 12-1.According to the figure above,at what point is aggregate expenditure less than GDP?

If aggregate expenditure is greater than GDP,how will the economy reach macroeconomic equilibrium?

An increase in aggregate expenditure has what effect on the equilibrium GDP?

The aggregate demand curve illustrates the relationship between ________ and the ________,holding constant all other factors that affect aggregate expenditure.

If consumption is defined as C = 1,350 + 0.6Y,then the value of the marginal propensity to consume is 0.6.

If firms sell exactly what they expected to sell,all of the following will be true except