Exam 23: Aggregate Expenditure and Output in the Short Run

Given Table 23-4 below,fill in the values of the marginal propensity to save (MPS)and the marginal propensity to consume (MPC).Show that MPC + MPS = 1.Table 23-4

If the consumption function is defined as C = 7,250 + 0.8Y,what is the marginal propensity to save?

If an increase in autonomous consumption spending of $10 million results in a $50 million increase in equilibrium real GDP,then

All of the following are one of the four main categories of spending identified by John Maynard Keynes except

When aggregate expenditure = GDP,

Table 23-6 -Refer to Table 23-6.Using the table above,answer the following questions.The numbers in the table are in billions of dollars. a.What is the equilibrium level of real GDP? b.What is the MPC? c.If potential GDP is $7,000 billion,is the economy at full employment? If not,what is the condition of the economy? d.If the economy is not at full employment,by how much should government spending increase so that the economy can move to the full employment level of GDP?

If aggregate expenditure is more than GDP,then inventories fall and GDP rises.

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

Given Table 23-3 below,fill in the values for saving.Assume there are no taxes.

If the economy is currently in equilibrium at a level of GDP that is below potential GDP,which of the following would move the economy back to potential GDP?

Consumer spending ________ and investment spending ________.

Which of the following correctly describes how an increase in the price level affects consumption spending?

Assume that inventories declined by more than analysts predicted.This implies that

Equations for C,I,G,and NX are given below.If the equilibrium level of GDP is $32,000,what is the marginal propensity to consume? C = 5,000 + (MPC)Y I = 1,500 G = 2,000 NX = -500

An unplanned increase in inventories results from

What impact does a decrease in the price level in the United States have on net exports and why?

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