Exam 11: Aggregate Expenditure

Which of the following could be a cause of consumption increasing?

One of the major insights by economist John Maynard Keynes about production was that:

If the MPC = 0.75 and a household obtains $50,000 more dollars then how much would the household spend of the additional $50,000?

One of the major insights by economist John Maynard Keynes about inventories and demand was that if planned inventories:

Using Figure 3 above, suppose that the economy was at Y1. This level of GDP would be considered:

Actual investment is the:

Over time in the long run we expect unplanned inventory expenditure to:

The amount by which consumption increases when after-tax income increases by $1 is called the:

The marginal propensity to consume:

When we say investment in economics we are talking about:

In general economic environments that correspond to lower levels of planned aggregate expenditure for a given level of Y have PAE curves that are:

The economist in the 1930s who is credited with key insights into causes of economic downturns was:

In Figure 1 above the Keynesian equilibrium occurs at what output level?

In Figure 1 above if the economy were at Y1 then we would expect there to be:

If the business taxes decreased for a firm, then we might expect investment spending to:

When we compare PAE and actual output (Y) the macroeconomic variable we generally use to directly assess their equivalence is:

If the government wishes to decrease GDP by $2,000b, and the MPC is 0.6, it should:

Suppose that someone has a disposable annual income of $50,000 and an MPC=0.8. They allocate $10,000 of that for necessities. The remainder of the income is both spent and saved. Based on this information autonomous consumption is:

If the government wishes to increase GDP by $1,200b, and the MPC is 0.8, it should:

Suppose that John allocates $10,000 of his disposable income for necessities. Any additional income beyond that is both spent and saved. Assume he has a disposable annual income of $50,000 and an MPC=0.8. Based on this information the amount of money John should save would be: