Exam 9: The Aggregate Expenditures Model

-Refer to the above diagram. The level of government spending:

-Refer to the above diagram for a private closed economy. At the $200 level of GDP:

If aggregate expenditures exceed the domestic output in a private closed economy:

In the aggregate expenditures model, a reduction in taxes may:

Planned investment equals saving:

-Refer to the above information. In this economy a 3 percentage point decrease in the interest rate will:

If a lump-sum income tax of $25 billion is levied and the MPS is 0.20, the:

-In the above private open economy exports are __________ and imports are __________ domestic GDP:

Refer to the information below. The multiplier for this economy:

-Refer to the above diagram which applies to a private closed economy. If gross investment increases from I_g1 to I_g2, the equilibrium GDP will:

If the MPC in an economy is .75, a $1 billion increase in taxes will reduce the GDP by:

-Refer to the above diagrams. Other things equal, Curve B will shift upward when:

-Refer to the above diagram for a private closed economy. At the $100 level of GDP:

Unplanned changes in inventories:

The investment schedule tends to be relatively stable over time.

In a mixed closed economy:

If the dollar appreciates relative to foreign currencies, we would expect:

If an increase in aggregate expenditures results in no increase in real GDP we can conclude that the:

Other: Pick-up -Refer to the above diagram. If net exports are X_n2, the GDP in the open economy will exceed GDP in the closed economy by:

The following information is for a closed economy: -Refer to the above information. The introduction of $80 billion of government spending has: