Exam 15: A Simple Model of the Macro Economy

The relationship between consumer expenditures and disposable income is the:

If every household in Australia won a lottery which gave each of them an extra $50 000 to spend, the:

The horizontal segment of the aggregate supply curve:

When the aggregate demand curve shifts to the right, intersecting the aggregate supply curve on its upward-sloping or vertical segment:

The horizontal axis used in the aggregate demand curve measures:

The ratio of the change in GDP to an initial change in aggregate demand is the:

Classical economists believed that:

The spending multiplier implies that any change in government spending will have a proportionally smaller impact on real GDP.

The net exports effect is the _____ relationship between net exports and the price level of an economy.

The only determinant of investment is the interest rate.

The pre-Keynesian or classical economic theory viewed the long-run aggregate supply curve for the economy to be:

In the aggregate demand-output model, if aggregate demand is less than GDP, then:

Which of the following are the components of the aggregate demand curve?

Along the Keynesian range of the aggregate supply curve, an increase in the aggregate demand curve will increase:

Along the intermediate range of the aggregate supply curve the price level and the level of GDP changes as an economy approaches full employment.

Stagflation occurs when an economy experiences the high unemployment and low prices simultaneously.

Narrbegin Exhibit 14.1 Aggregate supply curve -In Exhibit 14.1, there are plenty of idle resources and no upward pressure on prices in:

The Keynesian range is:

When the economy is operating well below capacity, an increase in spending tends to be reflected primarily in a/an:

The pre-Keynesian or classical economic theory predicted that in the long run the economy would experience: