Exam 22: Spending, Output, and Fiscal Policy

An economic recession in Japan ______ the demand for exports from East Asian countries resulting in a reduction in autonomous expenditures in these East Asian countries and a(n)______ output gap in the East Asian countries.

Expansionary policies are government stabilization policy actions intended to increase:

If firms sell more output than expected,planned investment:

In the short-run Keynesian model,to close a recessionary gap of $1 billion dollars government purchases must be:

If short-run equilibrium output equals 10,000,the income-expenditure multiplier equals 5,the mpc equals 0.8,and potential output (Y*)equals 9,000,then transfers must be ______ by approximately ______ to eliminate any output gap.

In the Keynesian cross diagram,the vertical intercept of the expenditure line equals ______ and the slope of the expenditure line equals _____.

The marginal propensity to consume (mpc)is the:

In the short-run Keynesian model where the marginal propensity to consume is 0.5,to offset an expansionary gap resulting from a $1 billion increase in autonomous consumption,government purchases must be:

When prices are predetermined,the level of output that equals planned aggregate expenditure is called ______ output.

A fiscal policy action to close an expansionary gap is to:

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.Short-run equilibrium output in this economy equals:

When real output decreases,planned aggregate expenditures decrease because:

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.Induced expenditure equals:

In the short-run Keynesian model,if the mpc equals 0.8,then to increase planned aggregate spending by $20 billion at any output level,government spending must be increased by ______ or net taxes must be decreased by _____.

The effect of a one-unit increase in autonomous expenditure on short-run equilibrium output is called:

Menu costs are the costs of:

Data on output and planned aggregate expenditure in Macroland are given below. 2,000 2,300 3,000 3,200 4,000 4,100 5,000 5,000 6,000 5,900 Based on these data,the short-run equilibrium level of output is _____.

All of the following would be included in planned aggregate expenditure EXCEPT:

In the Keynesian model,it is assumed that,when demand for a firm's product changes,the firm:

In Econland autonomous consumption equals 700,the marginal propensity to consume equals 0.80,net taxes are fixed at 50,planned investment is fixed at 100,government purchases are fixed at 100,and net exports are fixed at 40.Autonomous expenditure equals: