Exam 23: Aggregate Expenditure and Output in the Short Run

When we graph consumption as a function of national income rather than as a function of ________,the slope of this consumption function is the ________.

Table 23-4 Consumption (dollars) Disposable Income (dollars) \ 600 \ 1,000 900 1,500 1,200 2,000 -Refer to Table 23-4.Given the consumption schedule in the table above,the marginal propensity to save is

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?

You review a salesman's income over a 5-year period.You note it fluctuates tremendously from year to year,yet his consumption of goods and services remains consistently at the same level,year after year.Does this mean that income is not a determinant of consumption,or could something else explain his behavior?

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

If planned aggregate expenditure is less than total production

________ is defined as national income + transfers - taxes.

Suppose the United States experiences a long period of inflation relative to other countries.How will this affect U.S.net exports?

When Jack's income increases by $1,000,he spends an additional $850 dollars.This implies that his marginal propensity to consume is 0.85.

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

If the consumption function is defined as C = 5,500 + 0.9Y,what is the marginal propensity to consume?

If firms find that consumers are purchasing less than expected,which of the following would you expect?

When net exports equal zero,the economy is in macroeconomic equilibrium.

Macroeconomic equilibrium occurs when

Article Summary Gains in consumer spending and construction gave GDP a bigger boost than was forecast in the second quarter of 2015,growing at an annualized rate of 3.9 percent.Declining energy prices,rising home prices,and increased employment are being credited for much of the gain in consumer spending,which grew at an annualized rate of 3.6 percent.Increases in commercial and residential construction boosted business investment spending,which grew at an annual rate of 5.2 percent.Government spending also grew at an annual rate of 2.6 percent for the quarter.Economists cited the primary obstacle for continuing this growth pace in the third quarter is the need to reduce excess inventories. -Refer to the Article Summary.The increase in consumer spending discussed in the article summary was due in part to increases in employment and lower energy prices,which lead to an increase in disposable income.The increase in consumption resulting from the increase in disposable income will cause a(n)________ the aggregate expenditure curve.

If national income increases by $75 million and consumption increases by $15 million,the marginal propensity to consume is

When Jack's income increases by $1,000,he spends an additional $850 dollars.This implies that his marginal propensity to save is 0.85.

Each of the following is one of the four main categories of spending identified by John Maynard Keynes except

An increase in the price level results in a(n)________ in household consumption spending and a(n)________ in investment spending.

If planned aggregate expenditure is less than total production