Exam 22: Spending, Output, and Fiscal Policy

If short-run equilibrium output equals 10,000,the income-expenditure multiplier equals 5,potential output (Y*)equals 11,000,then government purchases must ______ to eliminate any output gap.

Automatic stabilizers are provisions in the law that imply automatic ______ in government spending or ______ in taxes when real output declines.

When actual investment is less than planned investment:

If planned aggregate expenditure (PAE)in an economy equals 3,000 + 0.75Y and potential output (Y*)equals 12,000,then this economy has:

The two parts of the Keynesian consumption function are consumption that depends on ______ and consumption that depends on _____.

Planned aggregate expenditure is total:

The bursting of the housing bubble in 2006 caused ______ to cut back on their spending,thereby shifting the PAE line _____.

In the basic Keynesian model,a decline in autonomous spending:

Changes in government purchases affect planned spending _____,and changes in taxes and/or transfers affect planned spending _______.

Dave's Mirror Company expects to sell $1,000,000 worth of mirrors and to produce $1,250,000 worth of mirrors in the coming year.The company purchases $300,000 worth of new equipment during the year.Sales for the year turn out to be $900,000.Actual investment by Dave's Mirror Company equals ______ and planned investment equals _______.

In the basic Keynesian model,a tax increase:

Short-run equilibrium output is the level of output at which actual output:

A fiscal policy action to close a recessionary gap is to:

The two parts of planned aggregate expenditure are ______ expenditures and ______ expenditures.

For an economy starting at potential output,a decrease in planned investment in the short run results in a(n):

The recession of 2007-2009 happened in part because,after the housing bubble burst in 2006,the ensuing financial crisis:

In the basic Keynesian model,an increase in transfer payments:

The recession of 2007-2009 happened in part because,after the housing bubble burst in 2006,disruptions in the financial market made it difficult:

In Macroland autonomous consumption equals 100,the marginal propensity to consume equals 0.75,net taxes are fixed at 40,planned investment is fixed at 50,government purchases are fixed at 150,and net exports are fixed at 20.Autonomous expenditure equals:

When housing prices decrease,household wealth _____,and consumption _____.