Exam 23: Aggregate Expenditure and Output in the Short Run

A general formula for the multiplier is

Table 23-7 -Given Table 23-7 below, fill in the values of the marginal propensity to save (MPS) and the marginal propensity to consume (MPC). Show that MPC + MPS = 1.

Would a larger multiplier lead to longer and more severe recessions or shorter and less severe recessions? Briefly explain.

A stock market crash which causes stock prices to fall should cause

Planned aggregate expenditure is equal to

If the consumption function is defined as C = 7,250 + 0.8Y, what is the value of the multiplier?

If planned investment is greater than actual investment, then aggregate expenditure is less than GDP.

An increase in the price level in the United States will have what effect on the aggregate expenditure line?

The passage of the ________ in 1930 sparked a trade war that caused net exports to decrease and real GDP to decrease.

C = 2,800 + 0.9Y I = 750 G= 1,200 NX = 150 Given the equations for C, I, G, and NX above, what is the equilibrium level of GDP (Y)?

If economists forecast an increase in aggregate expenditure, which of the following is likely to occur?

A decrease in Social Security payments will

If firms sell exactly what they expected to sell, all of the following will be true except

Figure 23-1 -Refer to Figure 23-1. At point J in the figure above, which of the following is true?

During a(n) ________ many firms experience reduced profits, which reduces ________ and investment spending.

Autonomous expenditure times the multiplier equals

Which of the following will decrease aggregate expenditure in the United States?

Which is the smallest component of aggregate expenditure?

The aggregate expenditure model focuses on the ________ relationship between real spending and ________.

Each of the following is one of the four main categories of spending identified by John Maynard Keynes except