Exam 11: Aggregate Expenditure

When referring to GDP, which is not a common alternative designation economists use?

If the MPC is 0.8, and the government spends an additional $100b, the overall effect on GDP will be:

What type of relationship exists between expected future income and consumption?

When PAE increases we expect that economy will be at ______ levels of equilibrium GDP.

When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:

Using Figure 3 above the distance between what 2 lines illustrate a recessionary expenditure gap?

The simplified expenditure multiplier:

One of reasons the government may choose to spend would be the:

Which of the following could be a direct cause of investment spending decreasing?

A recessionary output gap is defined to be when:

If we consider the equation PAE = A + bY the independent part of the equation that depends on income is:

Using Figure 2 above, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:

The popular and dominant school of economists in the 1930s who could not explain why the economy went into a depression were the:

Planned investment is the:

Which of the following is not a direct determinant of net export spending?

The multiplier effect suggests that:

The real exchange rate is defined to be the:

Using Figure 3 above, suppose that the economy was at Y2. This level of GDP would be considered:

The component of aggregate expenditure that is not like other components because, in general, it is directly neutral to macroeconomic changes is:

If the marginal propensity to consume was 0.75, it would mean that: