Exam 11: The Aggregate Expenditures Model

If GDP exceeds aggregate expenditures in a private closed economy:

The table shows a private open economy. All figures are in billions of dollars. Refer to the above table. If the investment Ig in this economy is independent of income GDP, then a $10 increase in its net exports would increase its equilibrium real GDP by:

Other things being equal, the effect of a downward shift of the economy's net export schedule on equilibrium GDP will be similar to a(n):

Consumption is $141 billion, planned investment is $15 billion, and saving is $15 billion in a private, closed economy. At this level:

When the economy is at its equilibrium GDP level, all of the following will occur, except:

In a private closed economy where MPC = 0.8, if consumers reduce their spending by $10 billion and firms cut investments by $5 billion, then equilibrium GDP will decrease by:

Assuming that MPC is .75, equal increases in government spending and tax collections by $10 billion will:

Other things being equal, a decrease in an economy's exports will:

In the Great Recession of 2007-2009, the sector of the economy that decreased the most was G.

The table shows a private open economy. All figures are in billions of dollars. Refer to the above table. The equilibrium real GDP is:

Refer to the above graph for a private closed economy. If the consumption schedule shifts up by $50 B at all levels of income or output, then the equilibrium GDP will increase to:

If the expected rate of return on investment decreases, then most likely the:

The data below are for a private (no government) closed economy. All figures are in billions of dollars. Refer to the table above. If planned investment is $25 billion, then aggregate expenditures at the income level of $560 billion will be:

An increase in imports, other things constant, would tend to raise the equilibrium level of GDP.

All figures in the table below are in billions of dollars. Refer to the above data. If this economy were closed to international trade, then the equilibrium GDP and the multiplier would be:

The major basic premise of the aggregate expenditures model is that if the total demand for output increases, then firms will raise their prices.

In 2008 during the Great Recession, the Federal government provided tax rebate checks to taxpayers in the hope that:

From the perspective of classical macroeconomic theory, an excess of aggregate spending would:

In an inflationary expenditure gap, the equilibrium level of real GDP is:

The data below are for a private (no government) closed economy. All figures are in billions of dollars. Refer to the table above. If planned investment is $15 billion, then at the $560 billion level of output, there will be a(n):