Exam 23: Aggregate Expenditure and Output in the Short Run

Suppose the United States experiences a long period of relatively stable prices while other countries experience long periods of inflation.How will this affect U.S.net exports?

The slope of the consumption function is equal to

At macroeconomic equilibrium

________ spending follows a smooth trend whereas,________ spending is more volatile and subject to fluctuations.

MPC + MPS =

Figure 23-2 -Refer to Figure 23-2.Suppose that the level of GDP associated with point K is potential GDP.If the U.S.economy is currently at point N,

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

If aggregate expenditure is greater than GDP,how will the economy reach macroeconomic equilibrium?

________ usually increase(s)when the U.S.economy is in a recession and decrease(s)when the U.S.economy is expanding.

Ceteris paribus,how does a recession in the United States affect U.S.net exports?

On the 45-degree line diagram,for points that lie below the 45-degree line

Firms in a small economy planned that inventories would grow over the past year by $500,000.Over that year,inventories did grow by exactly $500,000.This implies that

If planned aggregate expenditure is greater than total production

Investment spending will decrease when

All of the following are components of aggregate expenditure except

Consumption spending will ________ when disposable income ________.

What is the difference between aggregate expenditure and consumption spending?

A general formula for the multiplier is

Given the equations for C,I,G,and NX below,what is the marginal propensity to consume? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400

Figure 23-1 -Refer to Figure 23-1.If the economy is at point L,what will happen?