Exam 23: Aggregate Expenditure and Output in the Short Run

Figure 23-2 -Refer to Figure 23-2. Suppose that the level of GDP associated with point N is potential GDP. If the U.S. economy is currently at point K,

All of the following are true statements about the multiplier except

Firms in a small economy anticipated that inventories would grow over the past year by $750,000, and over that year, inventories grew by exactly $750,000. This implies that

If the consumption function is defined as C = 7,250 + 0.8Y, what is the autonomous level of consumption expenditure?

Household wealth is defined as the value of a household's

C = 2,550 + (MPC)Y I = 800 G = 1,100 NX = 50 If the equilibrium level of GDP is $11,250, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume.

Given the equations for C, I, G, and NX below, what is the marginal propensity to save? C = 1,000 + 0.8Y I = 1,500 G=1,250 NX = 100

If the MPC is 0.5, then a $10 million increase in disposable income will increase consumption by

As a result of slow economic growth following the recession of 2007-2009, many companies including Cisco Systems, Lockheed Martin, and Cracker Barrel Old Country Store cut production and employment as a result of the sluggish growth in the total amount of spending in the economy. The total amount of spending in the economy is known as

What impact does a higher price level have on interest rates, wealth, and investment spending?

Why is the aggregate demand curve downward sloping while the aggregate expenditure line is upward sloping?

If the consumption function is defined as C = 5,500 + 0.9Y, what is the value of the multiplier?

C = 4,000 + 0.5Y I = 1,500 G=2,250 NX = -150 Given the equations for C, I, G, and NX above, what is the equilibrium level of GDP (Y)?

Given the equations for C, I, G, and NX below, what is the equilibrium level of GDP? C = 1,000 + 0.8Y I = 1,500 G=1,250 NX = 100

Which of the following will reduce consumer expenditures?

What is the difference between aggregate expenditure and aggregate demand?

The Apple iPhone is sold in a box labeled "Made in China." A study by economists at the Asian Development Bank found the value of the iPhone components China ________ U.S. firms is ________ the value of assembling the iPhones in Chinese factories.

When Jack's income increases by $1,000, he spends an additional $850 dollars. This implies that his marginal propensity to save is 0.85.

If inventories decline by more than analysts predict they will decline, this implies that

An increase in the price level ________ real wealth, which causes consumption to ________.