Exam 30: The Aggregate Expenditures Model

A $1 increase in government spending on goods and services will have a greater impact on the equilibrium GDP than will a $1 decline in taxes because:

If the MPS is .25 and the economy has a recessionary expenditure gap of $5 billion,then equilibrium GDP is:

If unintended increases in business inventories occur,we can expect:

The U.S.recession of 2007-2009 provides a good example of:

If the marginal propensity to save in a closed economy is .25 and a lump-sum tax is imposed,the slope of the economy's aggregate expenditures schedule will be:

In a mixed open economy,which of the following all affect the equilibrium GDP in the same direction?

In a private closed economy,when aggregate expenditures equal GDP:

If net exports decline from zero to some negative amount,the aggregate expenditures schedule would:

If the MPC in an economy is .9,a $1 billion increase in government spending will ultimately increase consumption by:

Answer the question on the basis of the following data for a private closed economy. Possible Levels of Domestic \3 20 \ 320 330 327 340 334 350 341 360 348 370 355 380 362 Refer to the data.At the $370 billion level of DI,the APS is approximately:

The recessionary expenditure gap is the amount by which the equilibrium GDP and the full-employment GDP differ.

Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion.If the MPC is .625,what change in aggregate expenditures is needed to achieve full employment?

A lump-sum tax means that:

Answer the question below on the basis of the following information for a private closed economy: \1 00 \ 120 200 180 300 240 400 300 500 360 25\% \ 0 20 20 15 40 10 60 5 80 Refer to the information.If the real interest rate is 10 percent,the equilibrium GDP will be:

A recessionary expenditure gap exists if: