Exam 23: Aggregate Expenditure and Output in the Short Run

In a small economy in 2011,aggregate expenditure was $800 million while GDP that year was $850 million.Which of the following can explain the difference between aggregate expenditure and GDP that year?

If planned aggregate expenditure is less than total production,

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

Figure 23-3 -Refer to Figure 23-3.Suppose that investment spending increases by $10 million,shifting up the aggregate expenditure line and GDP increases from GDP₁ to GDP₂.If the MPC is 0.9,then what is the change in GDP?

What is the difference between aggregate expenditure and consumption spending?

Given the equations for C,I,G,and NX below,what is the equilibrium level of GDP? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400

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)?

The ratio of the increase in ________ to the increase in ________ is called the multiplier.

The slope of the consumption function is equal to

Inventories refer to

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

All of the following are components of aggregate expenditure except

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

Aggregate expenditure includes consumption spending,unplanned investment spending,government purchases,and net exports.

The key idea of the aggregate expenditure model is that in any particular year,the level of GDP is determined mainly by

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

As a result of slow economic growth in 2011,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

Use a 45-degree diagram to illustrate macroeconomic equilibrium.Make sure your diagram shows the aggregate expenditure function.Include in your diagram a point where aggregate expenditure is greater than GDP and a point where aggregate expenditure is less than GDP.

Figure 23-2 -Refer to Figure 23-2.If the U.S.economy is currently at point K,which of the following could cause it to move to point N?

Consumption spending is $5 million,planned investment spending is $8 million,unplanned investment spending is $2 million,government purchases are $10 million,and net export spending is $2 million.What is GDP?