Exam 10: Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Given the following data,what is the distance from the origin to the point where the total expenditures (TE)curve cuts the vertical axis? C = $400 + 0.75Yd I = $120 G = $270

If income rises from $1,000 to $1,400 and consumption rises from $800 to $1,168,the marginal propensity to consume is __________ percent.

If autonomous consumption rises,the TE curve shifts __________,the marginal propensity to consume __________,and the TP curve __________.

The ratio of the change in consumption to the change in disposable income is called the

Here is a consumption function: C = C₀ + MPC(Y_d).If consumption is $3,300,MPC =0.85,and disposable income is $2,100,what does autonomous consumption equal?

The Keynesian aggregate supply curve is

Most economists think that the Keynesian position is that

The answer is: "It is sometimes in the best interest of business firms to pay their employees higher-than-equilibrium wage rates." What is the question?

An increase in autonomous consumption,an increase in disposable income,or a decrease in the marginal propensity to consume can all increase consumption.

John Maynard Keynes believed that wages may be inflexible in the downward direction.Consequently,an economy

Suppose the MPC = 0.60 and government purchases increase by $40 billion.In Keynesian theory,which of the following is true?

Which of the following is true?

The economy is in equilibrium,TP = TE,and Real GDP is $4,555 billion.The MPC is 0.80,the multiplier is operative,and idle resources exist at each expenditure round.Government purchases rise by $10 billion.As a result,the __________ curve shifts __________,inventory levels unexpectedly __________,business firms ___________ the quantity of goods and services they produce,and Real GDP __________ by __________.

Inventory levels unexpectedly fall and as a result firms increase the quantity of goods and services they produce.Which of the following is consistent with these two occurrences?

If autonomous consumption rises by $20 and,as a result,Real GDP rises by $200,then the multiplier is

Exhibit 10-7 -Refer to Exhibit 10-7.If investment decreases,which of the following is possible?

Exhibit 10-2 -Refer to Exhibit 10-2.If autonomous consumption increases,the TE curve will shift ____________ and the new level of equilibrium Real GDP will be ___________ than $4,500.

John Maynard Keynes was the son of

When total production is greater than total expenditures,__________ is produced than households want to buy,which leads to __________ in inventory,which signals firms that they have __________,which causes firms to cut back production.

The marginal propensity to consume (MPC)refers to the proportion of disposable income that is spent on consumption.