Exam 23: Aggregate Expenditure and Output in the Short Run

C = 3,600 + (MPC)Y I = 1,200 G = 1,400 NX = -200 If the equilibrium level of GDP is $30,000,using the equations for C,I,G,and NX shown above,find the value of the marginal propensity to consume.

If the MPC is 0.5,then a $10 million increase in disposable income will increase consumption by

An decrease in the price level in the United States will shift the aggregate expenditure line downward.

Household spending on goods and services is known as

All of the following are true statements about the multiplier except

Which of the following is a reason why increases in the price level result in a decline in aggregate expenditure?

________ is equal to consumption spending plus planned investment spending plus government purchases plus net exports.

An increase in the price level in the United States will reduce exports and increase imports.

If the consumption function is defined as C = 7,250 + 0.8Y,what is the marginal propensity to save?

The larger the MPS,the smaller the value of the multiplier.

________ describes the relationship between consumption spending and disposable income.

If an increase in autonomous consumption spending of $10 million results in a $50 million increase in equilibrium real GDP,then

All of the following are true statements about the multiplier except

How does a decrease in government spending affect the aggregate expenditure line?

An increase in taxes will ________ consumption spending,and a decrease in transfer payments will ________ consumption spending.

If planned aggregate expenditure is less than real GDP,some firms will experience unplanned increases in inventories.

Figure 23-1 -Refer to Figure 23-1.If the economy is at a level of aggregate expenditure given by point K

If the MPC is 0.95,then a $10 million increase in disposable income will

If firms sell what they expected to sell,which of the following will be true?

Would a larger multiplier lead to longer and more severe recessions or shorter and less severe recessions? Briefly explain.