Exam 23: Aggregate Expenditure and Output in the Short Run

Investment spending ________ during a recession, and ________ during an expansion.

What is the macroeconomic consequence if firms accumulate large amounts of unplanned inventory at the beginning of a recession?

Table 23-2 -Refer to Table 23-2. Using the table above, compute aggregate expenditure and identify the macroeconomic equilibrium.

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending,

On the 45-degree line diagram, the 45-degree line shows points where

Equilibrium GDP is equal to

Autonomous expenditure is a type of expenditure that does not depend on

Household spending on goods and services is known as

If planned aggregate expenditure equals GDP, the economy is in macroeconomic equilibrium.

If the consumption function is defined as C = 5,500 + 0.9Y, what is the autonomous level of consumption expenditure?

If the marginal propensity to save is 0.4, the multiplier is 2.5.

All of the following are components of aggregate expenditure except

If aggregate expenditure is less than GDP, how will the economy reach macroeconomic equilibrium?

The multiplier is calculated as the change in ________ / change in ________.

How does an increase in government spending affect the aggregate expenditure line?

An decrease in the price level in the United States will shift the aggregate expenditure line downward.

If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP, then

An increase in the price level results in a(n) ________ in household consumption spending and a(n) ________ in investment spending.

On the 45-degree line diagram, for points that lie below the 45-degree line,

Table 23-8 -Given Table 23-8 below, fill in the values for saving. Assume there are no taxes.