Exam 21: The Is Curve

A tax cut ________ disposable income, ________ consumption expenditure, and shifts the IS curve to the ________, everything else held constant.

If actual output is greater than equilibrium output, firms will ________ output to keep from ________ inventories.

What do economists mean by the word "investment"?

Assume that autonomous consumption equals $200 and disposable income equals $1000. If total consumption equal $800, then the mpc equals ________.

Which of the following does not shift the IS curve?

The ________ describes points for which the goods market is in equilibrium.

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to ________, everything else held constant.

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________, everything else held constant.

When interest rates fall in Canada (with the price level fixed), the value of the dollar ________, domestic goods become ________ expensive, and net exports ________.

The Keynesian framework indicates that government can play an important role in determining aggregate output by ________.

A decrease in interest rates ________.

A shift in tastes in Canada toward American goods ________ net exports in Canada. and causes the quantity of aggregate output demanded to ________ in Canada, everything else held constant.

In the Keynesian framework, as long as output is ________ the equilibrium level, unplanned inventory investment will remain ________, firms will continue to raise production, and output will continue to rise.

A decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________, everything else held constant.

If net exports decrease by 250 and the mpc is 0.75, equilibrium aggregate output ________.

An increase in autonomous consumer expenditure causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________, everything else held constant.

An increase in unplanned inventory investment for the entire economy equals the excess of ________.

Planned investment spending, a component of aggregate demand, is equal to ________.

His analysis started with the recognition that the total quantity demanded of an economy's output was the sum of four types of spending: consumer expenditure, planned investment spending, government spending, and net exports.

A tax cut initially ________.