Exam 24: The Algebra of Demand-Side Equilibrium

Assume autonomous net taxes rise by $400; the marginal propensity to consume = 3/4.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,consumption will initially

Suppose both autonomous taxes and transfer payments increase by $50 billion.If the MPC = 0.75,by how much does equilibrium real GDP demanded change?

If autonomous net taxes decline by $40 billion and the MPC = 0.75,then equilibrium real GDP demanded

If government purchases and autonomous net taxes increase by the same amount,the equilibrium level of real GDP will be unchanged.

Assume autonomous net taxes rise by $400; the marginal propensity to consume = 3/4.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,saving will initially

An autonomous net tax will

Assume autonomous net taxes fall by $300; the MPC = 2/3.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.The value of the spending multiplier equals

Which of the following will not increase when net taxes decrease?

If the multiplier for autonomous government purchases equals 4,then it is true that the simple tax multiplier

An increase in net taxes

Exhibit 11-5 -In an economy characterized by the aggregate expenditure line in Exhibit 11-5,what would the equilibrium real GDP be equal to if autonomous net taxes decreased by $100?

Assume that initially G is $100 and equilibrium real GDP demanded is $1,000.If the multiplier is 4 and G increases to $200,real GDP demanded will increase

Assume autonomous net taxes fall by $300; the MPC = 2/3.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,consumption will initially

Assume autonomous net taxes rise by $500; the marginal propensity to consume = 0.75.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,equilibrium real GDP demanded will

A $200 increase in government purchases has a greater effect on the equilibrium level of real GDP than a $200 decrease in autonomous net taxes would.

Exhibit 11-5 -In an economy characterized by the aggregate expenditure line in Exhibit 11-5,how would a $100 increase in autonomous government spending impact real GDP?

Assume autonomous net taxes fall by $300; the MPC = 2/3.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.Disposable income will initially

Assume autonomous net taxes fall by $300; the MPC = 2/3.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,saving will initially

If government purchases increase by $10 billion when the MPC is 0.8,then real GDP will increase by $50 billion.

A change in autonomous net taxes affects the equilibrium quantity of GDP demanded